Representatives of international organizations and foreign business associations in Vietnam are expressing optimism about Vietnam’s economic prospects.
Giorgio Aliberti, Head of the EU Delegation to Vietnam: Cutting red tape
Despite the challenges posed by Covid-19, the EU and Vietnam’s business communities and people benefit from the EU-Vietnam Free Trade Agreement (EVFTA). The trade deal has helped European and Vietnamese exporters overcome difficulties of the global crisis and supply chain disruptions.
Vietnam has improved its business environment. However, red tape remains a barrier to better implementation of the trade deal, requiring further improvements. In addition, government efforts are needed to speed up institutional and legal reforms.
Vietnam needs to amend its outdated regulations on investment attraction. The country also needs legal regulations suited to a market economy without distinctions between domestic enterprises and foreign-invested ones in terms of taxes and other management mechanisms.
Jacques Morisset, World Bank Lead Economist and Program Leader for Vietnam: New motivations for growth
The Vietnamese economy may face risks due to the complicated developments of the Covid-19 pandemic with the emergence of new variants. Vietnam is an open economy dependent on the situation in other countries. Another risk is related to avoiding inflation while effectively implementing fiscal and monetary policies to stimulate growth and support economic recovery.
Vietnam has three new motivations for growth. The emergence of the Covid-19 pandemic has inadvertently made Vietnam a reliable destination for many large foreign enterprises seeking to diversify their supply chains. The country can also take advantage of opportunities provided by its green economy orientation stemming from its vulnerability to climate change. The third growth driver is domestic demand of the growing middle class. The World Bank will continue to support Vietnam in achieving its ambitious goal of becoming a high-income country by 2045.
Michele D’Ercole, Chairman of the Italian Chamber of Commerce (ICHAM) in Vietnam: Room for higher growth
Vietnam continues to be considered one of the most dynamic and attractive markets in the world, providing foreign investors with more opportunities in the fields of industry and high technology. New-generation free trade agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EVFTA and the UK-Vietnam Free Trade Agreement (UKVFTA), with comprehensive commitments in different economic and trade areas will create conditions for Vietnam to expand its markets, attract investment, and improve its export competitiveness.
Foreign direct investment (FDI) pledges to Vietnam in the first 11 months of 2021 reached about US$26.46 billion. This is a clear sign of foreign investors’ confidence in the prospect of Vietnam’s rapid economic recovery.
Any government now faces a daunting task of maintaining sustainable economic recovery and at the same time controlling the unpredictable developments of the Covid-19 pandemic. Vietnam’s positive economic outlook holds out hope of growth in infrastructure, seaports, highways, financial services, logistics, agriculture, renewable energy, ecological sustainability, digital transformation, e-commerce, and tourism.
Vietnam should reopen its doors to the world following the motto of safe and flexible adaptation and effective control of Covid-19.
Mary Tarnowka, Executive Director of the American Chamber of Commerce (AmCham) in Vietnam: US companies ask to narrow tax gap
AmCham Vietnam members are on their way back to trade and production activities and they are optimistic about the future of the Vietnamese market. According to a survey conducted by AmCham Vietnam, most members have returned to operations. For those who have not yet reached their normal capacity, over 60 percent hope to return to normal operations in the first quarter of 2022 and more than 90 percent are expected to work at full capacity in the second quarter of 2022. In particular, nearly 80 percent of surveyed members rated positive to very positive the medium- and long-term prospects of the Vietnamese market, and they have planned or are considering expanding investment in Vietnam.
To maintain production and enhance competitiveness, US companies hope for easy entry of experts into the country and access to third booster shots in the near future. Facilitating trade and cutting red tape are needed, in addition to narrowing the tax gap between Vietnam and the US.
Hirai Shinji, Chief Representative of the Japan External Trade Organization (JETRO) in Ho Chi Minh City: Japanese firms can decentralize operations to reduce risks
No one thinks about leaving Vietnam just because of a few difficult months posed by the Covid-19 pandemic, although they have to adjust their strategies and improve their production systems to suit the new situation. Japanese companies can reduce risks by promoting diversification and decentralizing operations.
The Vietnamese government, ministries and departments need to be more flexible in the implementation of Covid-19 prevention and control measures. Accordingly, they should accelerate Covid-19 vaccinations, facilitate trade and production activities by tax exemptions and reductions, overcome logistics challenges, and minimize the adverse impacts of Covid-19. Given that foreign investors are seeking an efficient and safe investment destination, Vietnam needs to prepare all conditions to meet their requirements.
Joseph Nelson, Head of the New Zealand General Consulate in Ho Chi Minh City: Vietnam needs to improve efficiency of foreign investment
Vietnam and New Zealand are members of the CPTPP and the Regional Comprehensive Economic Partnership (RCEP), providing the two countries with opportunities to promote economic, trade and investment cooperation.
Given that competition in FDI attraction among countries is increasing, especially for emerging and developing economies, Vietnam has proven its attractiveness, as reflected through its focus on administrative reforms and special investment incentives for foreign investors.
Vietnam is advised to improve efficiency of foreign investment. New Zealand is ready to cooperate with Vietnam in fields of agriculture, high-quality food processing, energy, digital economy and education.
Tharabodee Serng Adichaiwit, Deputy Chairman of the Thai Chamber of Commerce and Industry (ThaiCham) in Vietnam: Thai companies plan to expand business in Vietnam
Up to 90 percent of Thai companies were affected by the fourth outbreak of Covid-19, but they are on their way back to trade and production activities. By October 2021, Thailand was Vietnam’s ninth largest foreign investor with 636 valid FDI projects for total registered capital of nearly US$13 billion.
Effective Covid-19 prevention and control measures have contributed to promoting FDI attraction in Vietnam. About 4,000-5,000 Thai investors are expected to come to Vietnam in 2022, promising to pour additional billions of US dollar into Vietnam. Vietnam’s potential areas of interest for Thai investors include manufacturing, retail and energy.
The Vietnamese economy will rebound in 2022 and Thai companies plan to expand their trade and production activities in Vietnam in order to take advantage of opportunities provided by free trade agreements to which Vietnam is a signatory.
Andrew Jeffries, Country Director of the Asian Development Bank (ADB) in Vietnam: Vietnam should seize opportunities to promote exports
Asia’s exports are thriving with its recovery outperforming other regions in the world. This is an opportunity for Asian economies, including Vietnam, to promote export-led recovery, with the main exports being electronics, medical supplies and equipment, metals and machinery. Vietnamese businesses should seize opportunities to promote exports in 2022, especially those provided by free trade agreements to which Vietnam is a signatory.
However, Vietnam’s export growth may face a number of challenges, such as increasing transportation costs and the complicated developments of the Covid-19 pandemic with the emergence of new variants.
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