Chairman of the Vietnam Association of FDI Enterprises Nguyen Mai talkedto Ha Noi Moi (New Hanoi) newspaper about the past and future offoreign direct investment in Vietnam.
*Can you identify any major achievements in attracting foreign direct investments in the past 30 years?
Figuresfrom the Ministry of Investment and Planning showed that valid foreigndirect investment registered nationwide as of July amounted to 242billion USD. What is important about this figure is that it accounts for25 percent of the nation's total investment capital. It is alsoimportant because it helps establish new leading industries for thecountry like oil refinery, automobile manufacturing and chemicals.
*Doyou think that in previous years, Vietnam wasted many opportunities toattract FDI because of complicated administrative policies andprocedures?
Maintaining the same policy for attracting FDI fortoo long was our biggest shortcoming. In the beginning, our policy wasto attract FDI in all fields, even in projects with investment capitalworth 100,000 USD.
About 10 years ago, we began developingbetter potential but were slow in changing to new policies. We stillfocus more on the quantity rather than the quality of FDI projects.
Ithink the reason for this is that the administration has not caught upwith reality. It is also true that administrative procedures are stillcomplicated and lengthy. Recently, the Prime Minister has ordered thatadministrative procedures in the tax sector and customs procedures becut down to the same level as that of other ASEAN member countries by2015.
*You have cited shortcomings in the distribution of theauthority to examine and issue licenses for FDI projects. Can youelaborate on this?
Many provinces and localities have been toolax about issuing licenses to FDI projects and have failed to considerthe feasibility of such projects. There have been projects worth 4billion USD to 5 billion USD that were suspended just a few months afterlocal authorities approved them. This has seriously affected the imageof Vietnam's investment environment among international investors.
Weshould never pass on the right to choose what projects are good for thecountry. We respect investors who want to do business in Vietnam, butwe should refrain from attracting them using all means, especially inthe current context when we want to focus on the quality rather than thequantity of projects.
*How should we deal with that fact?
Tobe honest, it's difficult to change that policy. Local authorities wantto maintain their authority to approve FDI projects in their areas,while leaders at a higher level are sometimes generous with localauthorities. The result is spreading and ineffective investment.
Inorder to ensure the country's interest in attracting FDI, we need tocarry out certain adjustments. The Ministry of Investment and Planningshould have the authority to examine and approve licenses for importantprojects, such as those on power, transport and manufacturing that areworth 50 million USD or more. On the other hand, the local people'scommittees and the management of industrial zones should have theauthority to examine and approve licenses for projects that are worthless than 50 million USD.
There should also be a special mechanism for the big cities of Hanoi and Ho Chi Minh City.
*How do you evaluate Vietnam's investment environment?
Thevalue of registered FDI projects as of end-July this year is 80 percentof that in the same period last year. Some people see this figure as asign that our investment environment is "having a problem." I don'tthink so.
The fact is that disbursed investment capital byend-July this year increased by two percent compared with that of thesame period last year. It is expected that disbursed investment capitalfor the whole of this year will increase by five to seven percentcompared with that of last year.
Recently, I worked with Samsungand Intel on major projects in Vietnam. A CEO from Samsung told me thatthere are more than 40,000 workers currently working for his company inVietnam, and the number of people fired in previous years are too fewto mention. Intel, as well, has moved its factories from Costa Rica toVietnam, making our country its biggest factory site. We can see thatinvestors have a high regard for Vietnamese workers' skills.
Samsungwill also invest in its biggest research centre in Hanoi, which isexpected to attract more than 2,000 workers. We should give certainconsideration to the shifting of capital from traditional commerce tothe high-technology sector.
*What can Vietnam do to take advantage of this change?
First,we need to make the proper adjustments to our policies. We need a newmindset when considering FDI projects. We should choose only projectsthat are good for the country.
Second, there's an urgent need tochange the bureaucracy from the centre to the local level. Each personbelonging to that machine must adapt themselves to the changes. We needto change to a for-service administration.-VNA
*Can you identify any major achievements in attracting foreign direct investments in the past 30 years?
Figuresfrom the Ministry of Investment and Planning showed that valid foreigndirect investment registered nationwide as of July amounted to 242billion USD. What is important about this figure is that it accounts for25 percent of the nation's total investment capital. It is alsoimportant because it helps establish new leading industries for thecountry like oil refinery, automobile manufacturing and chemicals.
*Doyou think that in previous years, Vietnam wasted many opportunities toattract FDI because of complicated administrative policies andprocedures?
Maintaining the same policy for attracting FDI fortoo long was our biggest shortcoming. In the beginning, our policy wasto attract FDI in all fields, even in projects with investment capitalworth 100,000 USD.
About 10 years ago, we began developingbetter potential but were slow in changing to new policies. We stillfocus more on the quantity rather than the quality of FDI projects.
Ithink the reason for this is that the administration has not caught upwith reality. It is also true that administrative procedures are stillcomplicated and lengthy. Recently, the Prime Minister has ordered thatadministrative procedures in the tax sector and customs procedures becut down to the same level as that of other ASEAN member countries by2015.
*You have cited shortcomings in the distribution of theauthority to examine and issue licenses for FDI projects. Can youelaborate on this?
Many provinces and localities have been toolax about issuing licenses to FDI projects and have failed to considerthe feasibility of such projects. There have been projects worth 4billion USD to 5 billion USD that were suspended just a few months afterlocal authorities approved them. This has seriously affected the imageof Vietnam's investment environment among international investors.
Weshould never pass on the right to choose what projects are good for thecountry. We respect investors who want to do business in Vietnam, butwe should refrain from attracting them using all means, especially inthe current context when we want to focus on the quality rather than thequantity of projects.
*How should we deal with that fact?
Tobe honest, it's difficult to change that policy. Local authorities wantto maintain their authority to approve FDI projects in their areas,while leaders at a higher level are sometimes generous with localauthorities. The result is spreading and ineffective investment.
Inorder to ensure the country's interest in attracting FDI, we need tocarry out certain adjustments. The Ministry of Investment and Planningshould have the authority to examine and approve licenses for importantprojects, such as those on power, transport and manufacturing that areworth 50 million USD or more. On the other hand, the local people'scommittees and the management of industrial zones should have theauthority to examine and approve licenses for projects that are worthless than 50 million USD.
There should also be a special mechanism for the big cities of Hanoi and Ho Chi Minh City.
*How do you evaluate Vietnam's investment environment?
Thevalue of registered FDI projects as of end-July this year is 80 percentof that in the same period last year. Some people see this figure as asign that our investment environment is "having a problem." I don'tthink so.
The fact is that disbursed investment capital byend-July this year increased by two percent compared with that of thesame period last year. It is expected that disbursed investment capitalfor the whole of this year will increase by five to seven percentcompared with that of last year.
Recently, I worked with Samsungand Intel on major projects in Vietnam. A CEO from Samsung told me thatthere are more than 40,000 workers currently working for his company inVietnam, and the number of people fired in previous years are too fewto mention. Intel, as well, has moved its factories from Costa Rica toVietnam, making our country its biggest factory site. We can see thatinvestors have a high regard for Vietnamese workers' skills.
Samsungwill also invest in its biggest research centre in Hanoi, which isexpected to attract more than 2,000 workers. We should give certainconsideration to the shifting of capital from traditional commerce tothe high-technology sector.
*What can Vietnam do to take advantage of this change?
First,we need to make the proper adjustments to our policies. We need a newmindset when considering FDI projects. We should choose only projectsthat are good for the country.
Second, there's an urgent need tochange the bureaucracy from the centre to the local level. Each personbelonging to that machine must adapt themselves to the changes. We needto change to a for-service administration.-VNA
