According to Mr Elmar Dutt, Chairman of German Business Association (GBA), German companies are interested in high tech sectors in Vietnam, but he also reveals that Vietnam needs to improve framework and conditions for investment as incentives for high-tech investment. Duy Khang reports.
As a new appointed GBA President in Vietnam, would you suggest any measures to further strengthen investment and trade cooperation between Vietnam and Germany?
Vietnam has to become a country of sustainable innovation and invention, and Germany and all its stakeholders, especially the German Business Association with its 160 German companies operating in Vietnam, are committed for a strategic long-term, reliable, sustainable partnership with Vietnam to achieve this objective.
How do you evaluate business and investment activities of German companies in Vietnam, what difficulties are they facing?
Germany is today, with a bi-lateral trade volume around US$5 billion, Vietnam’s most important trade and economical partner in Europe and within the European Union. The upcoming visit of the Chancellor of Germany Mrs Angela Merkel with a high-ranking delegation from 11.10-12.10.2011 to Hanoi and Ho Chi Minh City underlines the importance of our long-standing strong bilateral economical relationship. I am convinced that the Chancellor of the Federal Republic of Germany and the Prime Minister of Vietnam will elevate our current economic relationship into an even stronger strategic partnership between our countries. However, the GBA-German Business Association representing more than 160 German companies in Vietnam, is alarmed and worried these days in general about the downward trend and instability of Vietnam’s economy. This is not only because of the current macro-economic and financial crisis, but also the slow pace of fundamental economic, institutional and educational reforms. German companies who want to invest in Vietnam as their hub re-think their options: Either invest elsewhere in the ASEAN region or delay their investments. A lot of German companies who are in Vietnam are halting future investments and expansion to consolidate their company-strategy, due to the current instability and negative trend of the overall investment-climate.
Vietnam has been trying to move beyond the current economic growth model which is based on low labour cost and intensive capital investment towards productivity and competitiveness as the core of growth, according to you, what are the challenges for the country to get it done?
The major concern of German companies are currently as mentioned not only the difficult macro-economical and financial situation of Vietnam, but that the real fundamental core problems of Vietnam have not consequently been tackled over the past years, which would send a positive signal to our companies and future potential investors to invest in Vietnam.
If the Vietnamese government wants to change its economic growth model to sustainability, efficiency in productivity and competitiveness, than it is essential that overdue core-reforms are taken.
Just to name three of the fundamental sustainable core-reforms which we would like to see the government of Vietnam takes consequent action on:
Educational reforms which would provide us with highly skilled employees in Vietnam from Vietnamese vocational schools and Universities who are up to competitive international standards.
Streamlined government-efficiency and policies to reduce bureaucracy, corruption and an uncertain legal and financial environment to reduce corporate risks, unnecessary overhead-costs and retain investors trust and confidence.
Mandatory implementation and enforcement of International Quality Standards and Norms throughout all industries such as the EIN (European Industry Norm) and IP-Rights to enable Vietnam to produce and export high-quality products and goods which are in compliance and competitive with other markets, and therefore reduce the trade gap.
In what fields do you think both countries need to increase cooperation in the coming time?
Germany and German companies are especially keen to invest sustainably in high-tech sectors in Vietnam. We have not only well-known major multi-national corporations who already invested in Vietnam, but a pool of 3 million highly specialized mid-size companies in Germany who are ready to invest, trade, source, service and manufacture in Vietnam.
In order to attract these high-tech investments of German companies to Vietnam, Vietnam has to improve its legal framework and conditions for investment – incentives for high-tech investments. Vietnam knows that it has strong competition from other ASEAN countries who also want to attract these German high-tech investors.
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