The 3rd session of the APEC Business Advisory Council (ABAC) was recently held in Ho Chi Minh City. Content of the session mainly involved increasing the attraction of investment environment of APEC member countries through efforts to effectively utilize FDI, abolish protectionist policies as well as issue appropriate policies for FDI and domestic investment…
Currently APEC is becoming a dynamic region with GDP increasing 5.4 percent, foreign direct investment (FDI) increasing 3 times compared to the previous years; an average of APEC’s FDI increased by 13 percent per year. The leading countries and territories having high rate of FDI include China, Hong Kong, Russia, and the USA ... The issue of investment in APEC is focused more than ever and has achieved impressive results, especially the increase in investment growth during the past decade. FDI is a major financial investment from the outside in most developing countries, equivalent to one third of total domestic product and also creates tens of millions of jobs in developing economies. Because of its topical feature, the problem how to attract FDI is discussed by experts in this session.
Speaking about the investment environment in Vietnam, Mr Lu Thanh Phong - Deputy Director of HCMC Planning and Investment said Vietnam has participated in and been playing an increasingly important role in international organizations such as APEC, ASEAN ... Vietnam has also built many maritime roadmaps linked Vietnam and other areas. In the context of contemporary present, Vietnam has gradually become an attractive investment destination of many countries in the region.
According to the Nikkei Economic Times (Japan), after the earthquake and tsunami disaster, Japanese investors are considering expanding branches and joint ventures with foreign partners to have secure investment destination. In particular, Japanese investors regard Vietnam as one of the first markets. However, in the whole process of development, Vietnam economy has shown many limitations such as unstable growth, lack of manpower, and poor infrastructure. Requirements set forth in the current context are to restructure the economy and take advantage of experience, technology and capital of foreign investors. At the same time Vietnam should have a policy to mobilize capital from the private sector for the country's economic development.
According to Mr Phong, FDI inflows are now shrinking. So attracting and "absorbing" the flow of capital are extremely difficult job. This requires Vietnam in particular and the APEC countries in general to have a more efficient direction.
Mr Anthony Nightingale, Managing Director of Jardine Matheson Holdings, Member of Hong Kong ABAC said in the future investment trend will shift to the emerging economies such as China, Thailand and Vietnam ... This is the opportunity for those countries to promote all their strength and strongly rise in the integration process. Economy is fluctuated so when making investment decision, investors have to consider thoughtfully. Mr Anthony recommends strengthening the determination of investors and that each APEC country need to liberalize the foreign investment laws, focus on transparency and consistency and at the same time always make new domestic investment environment.
About the comment of one delegate that the government often focuses on attracting FDI and always granting more favor for this capital, which makes domestic firms find it difficult and pressure as being involved in value chain, Mr Nick Reilly from the U.S. National Centre for APEC said that it’s not in vain that the government gives priority to FDI inflows. FDI enterprises have advantages in capital and technology ... they are an important factor in supporting economic development of a country. However, to correct the inadequacies of current investment, Mr Nick Reilly stressed that the government of each country should have appropriate policies to ensure FDI attraction parallel to domestic capital attraction. The Government should not extremely protect and nurture domestic investors because this will destroy their ability of self-reliance and development. More importantly, protectionism will tie FDI inflows. The most important thing is to eliminate protectionism, centralize harmonization between FDI and domestic investment, thereby creating incentives for economic development.
Talk about the benefits that foreign companies bring to a country, Mr. Anthony Nightingale said that when retail giant coming to a country, they bring about the new thinking of price, the issue of hygiene, food safety or other management standards. Mr Anthony said: "Protection of domestic enterprises from the harsh edges of the giants is needed but should not be extreme. It’s necessary to form an equal playing field, avoiding the “The great fish eats the small.” Besides the state must have a transitional period for local businesses to get acclimated to the new competition.”
On the issue of how to increase the attractiveness of investment environment, thereby to attract more FDI to join hands in developing the economies, Ms Virginia B. Foote - Chairman cum CEO of Bay Global Strategies said that it’s necessary to create an open and convenient investment environment. Government of each country should set a consistent standard in dealing with administrative procedures as well as solving disputes or claims not to hurt the righteous business. What is needed currently is to create a "serving corporate culture" where the managers, agencies and sectors gradually abolish power abuse and corruption which are rampant today. Managers, agencies and sectors are essential element to help the investment process become more rapid and harmonious; at the same time help resolve disputes and handle issues in a fair claim, proving transparency, and thereby creating confidence in investors.
My Chau
Vietnamese
