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This was the theme of the semi-annual plenary session of the Vietnam Business Forum (“VBF”) held in Hanoi, on Tuesday December 4th, which was attended in full by the Prime Minister Nguyen Xuan Phuc. This was also the 21st year of the VBF which was established under the auspices of the Wortld Bank and IFC together with the Vietnam Chamber of Industry and Commerce to provide a platform for dialogue between the private sector and Government.
Minister Nguyen Chi Dung (Ministry of Planning and Investment) referred to the excellent export performance expected to reach US$ 240 billion this year but cautioned on the subject of hidden inflation, low productivity and the impact of climate change. He talked about the need for the restructuring of the economy with a move to more automated manufacturing with higher value and the need for further development of the capital markets and continued improvement in the business environment. He finished by saying that we need to seize the opportunities from the changing trade environment including improvement in the regulatory environment for PPP, reform of the education system, use of technology and trade and customs reform.
In response the IFC (Kyle Kelhofer) mentioned that many countries were looking to strengthen trade ties and made reference to Vietnam’s signature of the CPTPP and that FTA’s signed or negotiated by Vietnam will help strengthen the private sector, which in turn will help local companies join the global supply chain. He encouraged the Government to look for higher value added FDI and mentioned the opportunity for Vietnam to lead in renewables.
From the Private sector there was a common call for an improved PPP regulatory environment with proper risk allocation and viability gap funding mechanisms.
In a concluding speech Prime Minister Nguyen Xuan Phuc made reference to the fact that review mechanisms and make changes as necessary in a positive attitude to liberal trade and globalisation.
He mentioned the fact that Vietnam is one of the world’s top producers in several sectors referring specifically to the “potential gold mine” in agriculture, Furniture manufacturing and tourism. He referred to the fact that in 2019, against a background of declining world growth that India and ASEAN will be the driving force for world growth.
He encouraged local businesses to focus on value added and stressed that cultural values will remain important and differentiation needs greater effort with less dependence on Government policy. It was important for a higher degree of collaboration between the FDI sector and local companies to get more participation in the global supply chain but at the same time confirmed the continued importance of FDI.
He further commented on the need to accelerate the improvement in the business environment, to reduce costs for business, to reform the taxation system and for Government to put business at the forefront.
Kenneth M Atkinson