Eurocham unveils policy proposals

Eurocham's Whitebook 2011, covering the major industries including pharmaceuticals, consumer goods, energy, banking, telecom, automotive and tourism, acknowledges that Vietnam has made progress this year in upgrading the regulatory framework, licensing and infrastructure.

In particular, progress has been made in the banking system with the promulgation of two important banking laws – the Law on the State Bank of Viet Nam and the Law on Credit Institutions.

The Whitebook highlights the Vietnamese government's recent introduction of new regulations on public-private partnership (PPP) pilot projects as well as the progress in implementing a "one-stop shop" approach for business/investment licencing, which combines the processes for obtaining business and tax licences.

However, there are still administrative burdens that impede European companies from doing business in Vietnam, said Eurocham chairman Alain Cany.

He encouraged the Vietnamese government to focus on the core structural issues in order to increase Vietnam's productivity and competitiveness in the medium and long term.

"We [Eurocham] believe now is the right time for Vietnam to concentrate on strategic key issues to further increase Viet Nam's competitiveness, such as upgrading the quality of the Vietnamese labour force, improving infrastructure and energy supply, encouraging sustainable PPP programmes and continuing regulatory and administrative reforms," Cany said.

He also emphasised the importance of structural reforms in order to increase the efficiency of the Vietnamese economy, specifically with regards to further equitising the State-owned enterprises.

Olivier Jacquet, a representative from France's Schneider Electronics, said Vietnam would need about $150 billion to develop infrastructure in the next 5-10 years and infrastructure development should remain high on the agenda as it would help sustain the nation's economic growth in the long term.

PPP was considered a good solution but the projects needed to be viable and bankable to offer foreign investors realistic returns on investment in the long run, Jacquet said.

Eurocham executive director Matthias Duhn encouraged Vietnam to promote a "culture of innovation" that values creativity, new technologies and value-added solutions.

By that, Vietnam could avoid the risk of falling into the "middle income trap", the inability to rise out of an economy based on cheap labour and low technology manufacturing methods to one based on value-added, knowledge-intensive manufacturing, he said.

"Vietnam should begin to develop a competitive advantage by improving their efficiencies and developing increasingly sophisticated products."