"To proactively and effectively attract investment inflows from Japan, Vietnam should focus on improving the investment climate, upgrading the essential infrastructure in a comprehensive and modern way and enhancing the quality of human resources," recommended Mr Hirotaka Yasuzumi, Managing Director of the Japan External Trade Organization (JETRO), Ho Chi Minh City Office within the framework of the programme "Connecting Trade of Vietnam and Japan".
The biggest advantage is that Vietnam no longer focuses on the overnight economic growth and uncontrolled investment flows in many areas, but on the intensive growth, economic restructuring and selective investment on a certain number of areas. Accordingly, there are many potential areas such as mechanical engineering, industrial and manufacturing assistance, financial markets opened to Japanese businesses to participate in investment and production.
Despite the rich resources and the potential investment opportunities from Vietnam to foreign investors, Dr Tran Du Lich expressed his concerns about the weakness of Vietnam in attracting investment, with the lack of human resource management in both quantity and quality. Besides, there are still limitations on essential infrastructure, poor infrastructure systems, inconsistent policies, lack of coordination and linkages between relevant ministries. These problems have reduced the attractiveness of the investment environment of Vietnam towards the Japanese investors, which limits the new investment flow from the Japanese investors in Vietnam. Dr Tran Du Lich stressed: "If Vietnam is about to remove these barriers, focus on improving the investment environment and implementing the outperformed preferential investment policies in comparison to neighbouring countries, the new investment from Japanese businesses will come to Vietnam more and more as a result."
Agreeing with Dr Tran Du Lich, Mr Hirotaka Yasuzumi said that in the recent years, the Japanese businesses tend to shift investment from China and Thailand to Vietnam because such markets are increasingly less attractive. Currently, Vietnam ranks second in the number of Japanese manufacturing companies in ASEAN, about 1,200 companies. The investment seems to be concentrated on the assembly industry, supporting industries, electronics and medical. Especially, for the recent three years, Japan has been the largest investor of Vietnam. In 2012, the total newly licensed FDI into Vietnam reached US$7.8 billion, and the investment from the Japanese companies accounted for 51 percent. Also as of August 2013, Japan was the biggest investor in Vietnam with over US$32 billion.
Mr Hirotaka Yasuzumi recommended that to help Japanese businesses increasingly improve their performance, fulfil investment commitments and effectively implement all the projects, there should be strong support from the Government and Vietnamese authorities. In particular, the government should focus on building a comprehensive infrastructure system, completing the essential infrastructure works including transportation, power, water and communications. Besides, the government should open the investment and business environment, boost the one-door mechanism for administrative procedures, issue the consistent guidelines and practices in applying the law, and improve the quality of human resources. This is the shortest way to welcome new investment flows from Japan to Vietnam.
In addition, the Vietnamese Government should develop mechanisms for low-interest loans and provide investment incentives such as tax incentives, human resource training for Vietnam enterprises in the supporting industry sector, as well as quickly and efficiently building the essential infrastructure systems such as transportation and electricity. Also, the government makes sure to implement the industrialization strategy in 6 areas: electronics, processed agricultural and fishery products, agricultural machinery, cars and car parts, environment and energy, and shipbuilding.
Japanese experts at the meeting also gave some suggestions for the development of the supporting industry, the improvement of the localization rate and other solutions to strengthen the competitiveness of Japanese companies operating in Vietnam. The more investment flows Japanese businesses in the supporting industry create in Vietnam, the more experiences and technology transfer will be shared, as well as more products sold in Vietnam.
Gia Phuc
Vietnamese
