Fast-track groups facilitating stronger economic activities

Private organisations are attempting to support the government in attracting major groups like Samsung

Bechtel Group Inc., the US’ biggest engineering, construction, and project management company, is interested in Vietnam as a part of its global investing expansion plan. The message was relayed by the managing director for Asia Pacific at Bechtel Enterprises at a dialogue on the business environment, private investment, and foreign direct investment (FDI) organised by Vietnam Business and Investment Fast Track (VBI Fast Track) and the National Private Economic Development Research Board on September 24 in Hanoi.

Investment firm VinaCapital is committed to working with VBI Fast Track to connect with global groups to invest in large-scale industrial and infrastructure projects in Vietnam. As a result, both groups will attempt to lure potential foreign investors such as Bechtel into pouring more money into the country.

With the participation of leading local groups, investment funds, and international organisations including URC Vietnam, Novaland, the American and European chambers of commerce (AmCham and EuroCham), and the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA), VBI Fast Track will accompany investors to help them to improve business and manufacturing activities.

Moreover, it will work with other investment funds and international organisations to connect with potential investors and call for projects suitable with the Politburo’s Resolution No.50-NQ/TW issued in 2019 on enhancing effectiveness of foreign investment cooperation to 2030; as well as government Resolution No.58/NQ-CP issued in April on fine-tuning mechanisms and policies to improve the efficiency of FDI until 2030.

Pham Phu Truong, CEO of VBI Fast Track, told VIR, “We signed cooperation agreements with VinaCapital and the HAWA to promote effectiveness of private investment and FDI, and have attained initial success. Our parties will continue to take advantage to both attract FDI inflows and help local enterprises join global value chains.”

HAWA chairman Nguyen Quoc Khanh said that the wood processing industry has played an important role in Vietnam’s export turnover in recent years and is currently the 5th in export value globally. The signing between the association and the group is expected to create favourable conditions for its members to establish a network between local and foreign-invested enterprises to create a global supply chain for the local wood industry and wood processing.

The COVID-19 pandemic has impacted economic growth and slowed Vietnam’s growth on an annual level, something the country is frantically trying to rectify. The debut of VBI Fast Track is one attempt to echo and accompany the government to reach this ambition. Thus, along with missions in promoting FDI inflows, the Board of Directors at VBI Fast Track expects to contribute to promoting socioeconomic growth via efforts to disburse registered FDI capital – but investors either have yet to implement development projects.

Statistics from the Foreign Investment Agency under the Ministry of Planning and Investment showed that in the past five years to the first quarter of 2020, the total accumulated registered FDI was $147.75 billion, $76.63 billion of which has been disbursed and leaving $71.12 billion undisbursed. The accumulated undisbursed capital from 1998 to the end of 2019 was $154.2 billion. If foreign investors dispensed 15 per cent of this within the year, more than $23.13 billion would flood into the economy.

“It is a crucial contribution in the context that both the export and tourism sectors are suffering due to the pandemic, and domestic consumption is considered the most important factor in helping Vietnam maintain economic growth,” said Pham Phu Ngoc Trai, founder and chairman of the Board at VBI Fast Track. “A piece of good news is that in only three months since the organisation was established, members of the group have committed to disburse an additional $1 billion in Vietnam,” Trai said.

The opportunities are within reach, but Vietnam still has to continue to implement reforms relating to policy as well as the business and investment environment.

The importance of synergy from private forces was mentioned at the dialogue when Truong Gia Binh of the National Private Economic Development Research Board said that the prime minister assigned the board to complete two reports. The first is on the difficulties for enterprises and their expectations. The second report is about the disbursement process of FDI. However, they do not yet have much resources to carry out a deep study. “We expect to have support from international organisations including Amcham, the International Financial Corporation, and EuroCham. They are bridges between authorised agencies and the business community to study investors’ specific issues. Besides that, their views will be the basis for the National Private Economic Development Research Board to advance recommendations for the government,” Binh said.

According to Trai, via real experiences of the group’s local and foreign members, VBI Fast Track will cooperate with local and international organisations to build a scheme in attracting FDI in the new era as well as study strategies to collect both public and private forces and optimise those forces in the process to improve the business environment and attract more FDI.