Foreign delegates at the conference.

VietNamNet – More than 700 foreign investors gathered in Hanoi on March 15^th to discuss investment and business opportunities in Vietnam following its impending accession to the World Trade Organization (WTO). Tuoi Tre spoke with investors at the meeting. 

Euromoney, the forum’s organizer, was surprised by the overwhelming attendance to the event. It was standing room only in the meeting room at the Melia Hotel. “Vietnam is now a focus of international attention, and Euromoney is aware that this is the right time to hold this seminar,” commented one American businessman. 

Vietnam’s growing prominence 

Richard Eyer, a representative of UOB Capital Partners LLC – a subsidiary of the UOB Group, which is the leading bank for private investment in Singapore – revealed that his company is looking to invest between US$10 and 12 million in a Vietnamese enterprise. 

In answer to the question, “Why Vietnam?” Mr. Eyre explained that according to his observations, Vietnam is not only catching up with other countries in the region in terms of attracting foreign direct investment (FDI), but it is actually surpassing them. 

Peter Ryder, Director of the American investment firm Indochina Capital, said, “American companies see the potential of Vietnam as an avenue for investment and as a trading partner. They realize that Vietnam plays an important role in the Association of Southeast Asian Nations (ASEAN) and in the region, in general. Vietnam simply needs to emphasize its potential. Joining the WTO is a positive step in that direction.” 

Anthony Salzman, Chairman of the Trac Group, a provider of industrial machinery, explained that foreign investors are paying attention to Vietnam because they hope that WTO accession will bring some basic changes to the country. 

At the seminar, foreign investors discussed with the Vietnamese government concerns surrounding the equitization process, privatization and creating a fair playground for domestic and foreign investors.  

“These are the big changes that investors expect, because they will help foreign investors gain access to information about Vietnamese markets. These changes are more important to attracting foreign investment than WTO membership by itself,” said Mr. Salzman. 

How not to miss opportunities  

The General Director of Nike Vietnam, Amanda Tucker, reinforced two issues that she believes must be considered. First, though there have been improvements to Vietnam’s infrastructure, many aspects, like roads and seaports, are still inadequate by international standards. Secondly, the law and government operations still lack necessary transparency. “I don’t think the government has yet attached enough importance to the opinions of foreign investors on how to improve the investment environment in Vietnam,” she related. 

According to Mr. Salzman, the cost to buy or lease land in Vietnam is still double what it is in Thailand, and that is unacceptable. 

Michael Smith, Chairman of the Hong Kong and Shanghai Banking Corporation for Asia-Pacific, analyzed that the flow of capital to Vietnam helps the country by bringing more opportunities and jobs to the private sector, but it also poses challenges for management, because the financial and investment tools in Vietnam are still insufficient. 

“For integration to significantly benefit Vietnam, the country needs a firm economic structure. The banking system in Vietnam needs to be improved until it becomes a stable and well regulated system,” said Mr. Smith. 

In a speech at the seminar, Deputy Prime Minister Vu Khoan said that in order for Vietnam to achieve its goal of escaping from the list of underdeveloped countries, it will need to maintain growth of 8% a year to 2010 and attract approximately $140 billion of investment capital. 

Though much work remains, Vietnam has never had as complete and transparent a legal system as it has at present; the landmark Enterprise and Common Investment Laws will take effect on July 1^st. 

Many investors at the seminar commented that the current cheerful mood of investors can be likened to the first wave of investment in Vietnam in 1993-1994. The question on everyone’s mind is, “How does Vietnam not miss this opportunity?”  

“Investors are encouraged by the Vietnamese government’s commitment to pursuing door-opening policies and reforms. Nevertheless, they are watching closely to see how the country will honour its international commitments. It would be truly regrettable if Vietnam were to miss this opportunity,” said an American investor. 

(Source: Tuoi Tre)