The Vietnamese Ministry of Planning and Investment and the Japan International Cooperation Agency (JICA) have recently organised a joint seminar on “Attracting investment from Japanese small and medium-sized enterprises to develop supporting industries in Vietnam” in Hanoi. On this occasion, Reporter Anh Phuong interviewed Mr Motonori TSUNO, Chief Representative of JICA in Vietnam.
To attract foreign investors, clear and transparent policies are very important. Do you think the Government of Vietnam has done this work well?
In my opinion, the Government of Vietnam takes care of this issue especially since Vietnam became a full and official member of the World Trade Organisation (WTO) in 2007. With its opening up policies, broadening global economic integration, and economic development achievements, Vietnam has become an appealing destination and has been highly appreciated by the international business community. In addition, Vietnam’s advantages of young, creative and intelligent workforce, favourable geographical location for international exchanges, social and political stability among others are underlying drives for Japanese investors to strengthen investment cooperation programmes with Vietnam.
The Government and other competent authorities of Vietnam are very dedicated and apply open policies and incentives to entice foreign investors. To be precise, the Decision No. 12/2011/QD-TTg dated April 24, 2011 can be seen as a boost for Vietnamese supporting industries. According to this regulation, some supportive industries like mechanical engineering, electronics, automobile, textile and apparel, footwear, and high-tech supporting fields will be encouraged for development. From this important decision, investors from not only Japan but also from the rest of the world are interested in incentives when they invest in supporting industries. Markedly, investors are given lands in good location, with proper size and competitive rentals. Supporting industry projects in industrial parks are permitted to use infrastructure, public utilities and other services in addition to supports for labour recruitment.
Projects manufacturing industrial supporting products may be financially supported for technology transfer, design rights, software purchase and foreign expertise hire by the National Scientific and Technological Development Foundation and other funds related to scientific and technological activities.
In fact, some investors are dissatisfied with soft skills in Vietnamese industrial parks. What is your opinion about this?
That’s true. In addition to preferential policies and investor-friendly legal documents, soft skills in Vietnamese industrial parks are still weak. I can take some examples from our Japanese investors. Currently, Japan is a big investor in Vietnam with many large investment projects and factories operating in many fields like automotive, machine manufacturing and electronics led by world-acclaimed brands such as Toyota, Honda, Sony and Canon. But, when they do business here, many new problems appear as a result of differences in cultures, working styles and languages. To this effect, the force of Vietnamese translators remains weak. They can do well their jobs at the simplest stages but when they have to do with in-depth specialised materials, or act as a bridge for Japanese specialists and Vietnamese officials, they hardly convey full information to both parties to completely understand each other. So, in my opinion, related organs need to have plans to recruit persons with profound knowledge of Japanese language to convey information better. They can employ Japanese specialists for this work because they have good knowledge of our conditions, practices and business models. As a component of the Japan International Cooperation Agency (JICA), we have a lot of specialists of different industries and we are ready to help if the Vietnamese side requests.
Are there any other obstacles?
The above are easy-to-change matters. To attract more Japanese SMEs to invest in Vietnam, Vietnam needs to improve other matters which will need more time to deal with, for example lower taxes on supporting companies. To do so, production costs will lower, thus facilitating this industry to develop in the future. On the other hand, this is a large playground with a vast market and the Vietnamese Government and relevant authorities should promote marketing strategies to introduce and upgrade its image and incentives to international business community. Vietnam can also refer to Japan’s experiences. We now have a business development department to coordinate and manage business operations in this field to achieve highest performance. As far as I know, there are similar agencies in Thailand and Taiwan. In the short term, Vietnam should also have a plan to establish a unique specialised agency responsible for promoting the development of supporting industries. It should put an end to overlapping functions and responsibilities of State agencies. To my knowledge, while the Ministry of Planning and Investment is assigned to manage [concentrated] industrial parks, the Ministry of Industry and Trade is authorised to manage Industrial complexes (smaller than industrial parks). Overlapping will largely reduce the efficiency of investment attraction. In addition, the interconnection of government agencies in Vietnam is still very weak and ‘one-stop shop’ model has not been brought into full play.
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