Vietnam Needs to Further Invest in Basic Infrastructure: Foreign Investors

Vietnam needs to further invest in basic infrastructure such as electricity, water, transportation and communications as the country’s infrastructure development is slower than its economic growth, according to foreign investors.

 

Infrastructure development, however, needs large amounts of investment capital, the country has to change its views and devise specific measures to lure investment into the field such as allowing the participation of private enterprises.

 

President of the Australian Chamber of Commerce and Industry, Joshua Magennis, proposed that the Vietnamese Government change its views and create more favorable conditions for foreigners to have holdings in the infrastructure sector.

 

He highlighted that in many other countries, the State and private sector have closely coordinated to develop infrastructure. Although the Vietnamese Government allows the private sector to invest in the field, in fact, few foreigners have holdings in infrastructure projects.

 

President of the US Chamber of Commerce, Jeff Puchalski, said foreign direct investors have plans to increase export volumes. However, with current infrastructure, especially in the southern key economic region, ports find it difficult to receive large ships.

 

"We are proposing the Government allow the private sector to develop sea port infrastructure," Mr. Puchalski said.

 

Business associations have also proposed the Government let the private sector take part in infrastructure projects.

 

Director general of the Hanoi Industry and Commerce Association, Vu Duy Thai, said despite the Government’s effort, State budget and ODA cannot provide enough capital for infrastructure development.

 

Deputy president of the EU Chamber of Commerce, Preben Hjortlund, said in fact infrastructure development is happening slower than economic growth, creating a burden for investors, emphasizing “we pointed out the weakness and supported the idea of attracting private enterprises to invest in infrastructure projects such as ports, airports, electricity generation plants and telecommunications”.

 

Vietnam this year plans to disburse VND56.12 trillion (US$3.55 billion) from the State budget for infrastructure construction, compared with VND62.93 trillion (US$3.98 billion) last year.