Holistic ideas can aid investment

Adam Sitkoff, executive director American Chamber of Commerce in Hanoi

It is incumbent upon the business communities of both countries to capitalise on this momentum to unlock higher levels of two-way trade and investment, while working with both governments to break down the challenges and obstacles standing in the way.

The United States is Vietnam’s second-largest trading partner, its largest export market, and one of the top drivers of investment here. Vietnam has risen to become a top-10 trading partner of the US, and the economic relationship between the two countries is expected to continue its rapid growth. Vietnam is increasing its attractiveness as a destination for American investment as many companies seek to diversify their global supply chains.

I believe the most important factor for a favourable investment climate is a fair, predictable, and streamlined regulatory environment that values innovation - not only to draw in new investment, but also to maintain and grow the investment already here. There is no doubt that existing investors expanding operations is the best advertisement to engage new investment.

Although there are uncertainties in the global economy, there are many things the government can do right now to improve the business and investment climate that will help increase productivity and reduce the costs, complications, and risks of doing business in Vietnam.

There are always ways to improve the business climate, and we appreciate Vietnam’s efforts to streamline administrative procedures. However, some regulations continue to introduce new administrative procedures such as licensing, approvals, and heavy reporting requirements.

I encourage the Vietnamese government to clarify those elements of Vietnamese law that hinder the efficient deployment of foreign investment, and that any additional administrative burdens in draft laws and regulations be carefully considered and avoided whenever possible.

Crucial to many US manufacturers choosing Vietnam is the ready access to renewable power. Any plans for expansion of current facilities or supply relocations should include green energy solutions. To achieve its zero-carbon goal by 2050, Vietnam should prioritise energy sources that are both affordable and socially sustainable.

This process will require financial and technical support from external sources – and the projects need to be realistic and bankable. Vietnam should eliminate current regulatory uncertainties to unlock substantial international capital waiting on the sidelines. We know that new power grid projects will attract investment and expand the capacity of Vietnam’s renewable energy sources, providing safe and reliable energy supply for both residential and commercial consumers.

The American Chamber of Commerce (AmCham) appreciates the Vietnamese government’s effort to support the country’s transition to a digital economy. Our members work actively to support this transformation, both with Vietnamese partners and through their own projects.

We urge the government to take a holistic approach and global view in developing a digital regulatory framework. The free flow of data across borders, and access for Vietnamese users to global-standard services and data protection, are vital to that transition.

I see tremendous opportunities for American investors here, although getting promised investments to actually happen is often challenging in today’s globally competitive environment. Attracting new foreign investment requires continuous improvements in infrastructure development, protection of intellectual property, education reform, health and wellness policies, legal and tax policy certainty, and enhanced transparency in Vietnam.

AmCham looks forward to partnering with the Vietnamese government to navigate these challenges and improve business conditions that strengthen the private sector, ensure sustainable economic and social development, and promote prosperity here. Progress in these areas will not only help attract more foreign investment, but will also support Vietnam’s aspirations to propel itself to the next sphere of economic competitiveness.

This year marks 30 years of AmCham in Vietnam, and together AmCham members represent billions of US dollars in foreign investment, tens of thousands of direct employees, hundreds of thousands of indirect employees, and a significant share of Vietnam’s exports and tax revenues.

American companies have an interest in Vietnam’s continued success. In this regard, I will continue to work on lowering barriers to trade, to help the Vietnamese government make it easier to do business, and to create a high-standard, transparent, and stable business environment.

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