The Government should clearly spell out its incentives for investment insupport industries and not be vague about them, an investment officialtold a recent conference in HCM City.
Nguyen TheHung, acting director of the Southern Investment Promotion Centre, saidfor instance, the Government's decision last February to boost supportindustries in some key sectors such as mechanical engineering, IT,electronics, textile and garments, leather footwear, and technology wasnot specific enough.
Speaking at the Oct.7 conference heldon the sidelines of the Metalex Vietnam and Nepcon Vietnamexhibitions, he said: "The incentives were too general and notattractive enough to investors.
"Investors want to knowthe specific support. For example, the decision said merely theGovernment would offer import duty breaks for machines but did not sayhow much."
The Government offers assistance to investorswith advertisement, investment and trade promotion programmes,distribution networks, land lease, and technical support besides theimport tax breaks.
Industrial parks stopped offering incentives to investors after the country became a member of the World Trade Organisation.
Only hi-tech parks and economic zones still offer incentives, but theSai Gon Hi-tech Park is almost full while economic zones in the centralregion lack good infrastructure.
"The development ofsupport industries is an important and urgent task for improving thecompetitiveness of Vietnamese products," Hung said.
Speaking at the opening ceremony of the exhibitions, Doan Duy Khuong,deputy chairman of the Vietnam Chamber of Commerce and Industry, saidmany industries, especially producers of export products, continue torely overwhelmingly on imported feedstock and parts.
The country has to import as much as 80 percent of these, he said.
The auto industry uses only 5 to 10 percent of local parts, while for motorbike makers it is 40-70 percent.
Though foreign companies in Vietnam are potentially interested inlocal procurement, the domestic support industries cannot supply them,he said.
"If the situation does not change, large foreign assemblers and producers will leave Vietnam ."
While Vietnam remains one of the most attractive investmentdestinations in the region, it needs to enlarge its base of supportindustries to continue attracting FDI, he added./.
Nguyen TheHung, acting director of the Southern Investment Promotion Centre, saidfor instance, the Government's decision last February to boost supportindustries in some key sectors such as mechanical engineering, IT,electronics, textile and garments, leather footwear, and technology wasnot specific enough.
Speaking at the Oct.7 conference heldon the sidelines of the Metalex Vietnam and Nepcon Vietnamexhibitions, he said: "The incentives were too general and notattractive enough to investors.
"Investors want to knowthe specific support. For example, the decision said merely theGovernment would offer import duty breaks for machines but did not sayhow much."
The Government offers assistance to investorswith advertisement, investment and trade promotion programmes,distribution networks, land lease, and technical support besides theimport tax breaks.
Industrial parks stopped offering incentives to investors after the country became a member of the World Trade Organisation.
Only hi-tech parks and economic zones still offer incentives, but theSai Gon Hi-tech Park is almost full while economic zones in the centralregion lack good infrastructure.
"The development ofsupport industries is an important and urgent task for improving thecompetitiveness of Vietnamese products," Hung said.
Speaking at the opening ceremony of the exhibitions, Doan Duy Khuong,deputy chairman of the Vietnam Chamber of Commerce and Industry, saidmany industries, especially producers of export products, continue torely overwhelmingly on imported feedstock and parts.
The country has to import as much as 80 percent of these, he said.
The auto industry uses only 5 to 10 percent of local parts, while for motorbike makers it is 40-70 percent.
Though foreign companies in Vietnam are potentially interested inlocal procurement, the domestic support industries cannot supply them,he said.
"If the situation does not change, large foreign assemblers and producers will leave Vietnam ."
While Vietnam remains one of the most attractive investmentdestinations in the region, it needs to enlarge its base of supportindustries to continue attracting FDI, he added./.
