Explore our insights

The meeting which was attended by Prime Minister Nguyen Xuan Phuc, MPI Minister Nguyen Chi Dung, Head of the World Bank In Vietnam, Head of the IFC in Vietnam, Dr Vu Tien Loc-President of the Vietnam Chamber of Commerce and Industry, other Ministers and deputy ministers and members fot eh various Business Chambers in Vietnam, marked the 20th anniversary of the VBF in Vietnam, a platform for dialogue between the Private sector and the Vietnamese Government supported by the World Bank, IFC and other Bi-lateral and multi-lateral donors.

Asia Pacific is a vast and diverse region, and one of the strongest performing parts of the global economy.

The first project, I was involved in as project director, to assist the Vietnamese Government to speed up equitisation or privatization as we know it in the west, was funded by the Asian Development Bank in the year 2000. At that time there were over 12,000 SOE’s and whist the number has much reduced very few of the enterprises, which have been sought after by foreign investors in particular, have come to market through IPO’s.

Ho Chi Minh City (“HCMC”) has long been regarded as the commercial “capital” of Vietnam and the largest contributor to the state budget. It has been the economic spearhead for the whole Mekong Delta region since “Doi Moi”. However in recent years the growth rate in HCMC has been seen to be slowing. In 2010 GDP growth was 11.8% and between 2010 and 2015 ranged from 9.2 to 11.8% whilst in 2016 and forecast 2017 the rate will be in the range of 8%.

After months and years of discussion and deliberation Vietnam has finally published circular 102/2017/TT-BC, which will help guide the implementation of Decree 3/2017/ND-CP which was passed earlier in 2017. The big game changer is the fact that Vietnamese citizens will be able to enter casinos from December 2017, which up until now have been restricted to foreigners. The debate has really between balancing the communist ideals and the pragmatism of recognizing the significant tax revenue lost every year to neighboring countries and in particular Cambodia.

With all the news and high profile visits last week for the Asia Pacific Economic Cooperation (“APEC”) Summit, it would be remiss of me not to remind my readers of the goals of APEC and importance to Vietnam.

An efficient transport system in critical for Vietnam’s development, both in boosting urban area prosperity and reducing rural inequalities. Transport is high on the Government’s priority list because it is critical to the two biggest sectors Services and Tourism and manufacturing.

The significant move towards electronics is the main factor behind the continued growth in exports from Vietnam. Over recent years electronic goods, in particular, mobile phones and applications have taken over the top spot previously occupied by textiles helping ensure a continued future growth in exports.

The IT sourcing market has long been tipped as a natural for Vietnam but has been a long time in the development phase. However, in AT Kearney’s 2017 Global Services Location Index, published last week, Vietnam has entered the top ten destinations at number 6 out of 55 countries and a rise of 5 places from 2016. The survey /Index covers both IT outsourcing and Business Process Outsourcing.

Last week the Ministry of Trade (‘MOIT”) released decision 11/2017/QD-TTg relating to encouraging the development of the solar power sector in Vietnam. I have previously highlighted the opportunities and significant growth potential in this sector.

In reality Vietnam currently has 27 listed casinos however very few of these have live tables. There are new planned facilities, that have been licensed in Van Don and Phu Quoc (to Sun Group and Vin Group) and these are the only 2 so far licensed for local players. It is rumored that Ho Tram will be added to the list. Ho Tram being the only truly international facility currently operating in Vietnam.

Are we finally going to see a defining moment in the reduction of red tape and bureaucracy and time consuming reports and submissions to local authorities and other Government departments? Well it certainly is starting to look that way if recent recommendations are implemented.

As Vietnam wrestles with the reduction of the fiscal deficit, there is a lot of focus from the tax authorities on how to collect more tax. With its large internet connected population (45% of the population of 93 million) there has been a rapid increase in selling through on line channels and this is now becoming a target for the tax authorities.

Vietnam will transition from paper invoices to electronic invoices, if the proposal from Ministry of Finance is accepted, from the beginning of 2018. This is effectively in less than 5 months’ time.

Last week I attended the annual M & A conference organized by VIR, which was opened by the Minister of MPI Nguyen Chi Dung who commented on the need for businesses to improve efficiency and competitiveness and for the Government to improve the regulatory environment.

Last week’s insights made brief mention about the need for the reform of the Agricultural sector and in the press these last few days there have been several articles on the sector, so I thought it was worth revisiting.