Dam Nhan Duc - Head of Research and Corporate Development, Military Bank
In new-generation free trade agreements, there are commitments on equal treatment between Vietnamese and foreign investors. This means more favourable conditions for reforming policies, and regulations more consistent with international practices. Thanks to that, Vietnamese businesses have opportunities to approach a better developed market and attract more investors, thereby improving governance, management, and financial ability.
However, the competitiveness of the Vietnamese economy and businesses as well as products is not yet strong enough. There remains a considerable gap between international practices and Vietnam’s economic institutions and business investment environment.
If Vietnam does not make efforts to reform and finalise the market economy institutions, these may be barriers that prevent the inflow of quality foreign investment into Vietnam, thereby making it hard for the country to improve the competitiveness of goods and products in the world market.
Patricia Marques - General director, Starbucks Vietnam
The pandemic has put us into many difficulties, with the loss of traffic locally impacting our business significantly. It will take a while for consumer habits to go back to normal. Understandably, they are still concerned with the health crisis and limit travelling or spending.
To adapt, we have been taking action to keep our expenses tight and only spend when necessary. Cash flow is important to sustain the business through the year. We are also working tightly with landlords to get their support.
The government has postponed the timeline for tax payments, helping us partially ease some hardships. However, we have yet to reach the local government’s subsidy package due to the strict requirements.
In Hong Kong, the government supports 50 per cent of a company’s labour expenses if it can prove it has not laid off anyone. This way, the government protects jobs. This is one example of something that could be looked at here.
Tomaso Andreatta - Vice chairman, European Chamber of Commerce in Vietnam
The banking industry is one of the most vulnerable sectors during the COVID-19 pandemic. How could they have a stellar performance or gain profits when their major clients such as hotels, restaurants, tourism, and aviation industries are getting bogged down with disruptions?
Many lenders, even world-class ones, have gradually scaled back their global ambition and refocused on their home markets instead. This has also happened in Vietnam. Notwithstanding, in the long run, the Vietnamese market would be much better if more international banks beefed up their presence in the country. The government should take more drastic actions to woo foreigners joining the financial landscape, especially in the banking industry.
Tie-up deals between Vietnamese and foreign lenders would push local banks to approach international practices, which is definitely a positive sign. I have great confidence that cooperation with internationally recognised financial institutions would offer great mutual benefits.
Nguyen Vo - Founder and CEO, Straw Greenjoy
EU markets currently consume about 60 per cent of our manufacturing output. As the pandemic remains serious in Vietnam as well as in the wider world, the number of orders in the third quarter dropped by 30 per cent against the first quarter of this year.
Moreover, revenues fell by 30 per cent against the company’s development plan. Increasing transportation costs due to shipping by sea or air freights have made many EU customers hesitant in purchasing goods.
To overcome the challenge, we have tried to lessen expenses such as land leasing. In addition, we also attempt to complete all orders in time, maintain inventory at a controllable level, and reduce working hours for employees.
Currently, our performance has steadily recovered and we are focusing on making a back-up plan for the next 3-6 months. However, we have yet to approach the government’s subsidy package.
Kyle F. Kelhofer - Country manager Vietnam, Cambodia and Laos, International Finance Corporation
The prospect of reaping favourable returns from Vietnamese investment is irresistible to foreign investors.
As a part of the World Bank Group, we are a true believer of sustainable finance. Besides the public sector, we are delighted to support private sector development in Vietnam, especially companies satisfying governance, environment, labour, and working standards, to boost the country’s prosperity and shared prosperity.
Moreover, the foreign ownership ratio of Vietnam’s banking industry is currently capped at 30 per cent. We would like to see the Vietnamese government lift the cap to lure more overseas, high-quality funds. For instance, the foreign “room” between 30 to 50 per cent would bring additional capital and transfer international expertise to strengthen the domestic banking landscape. If the banks are financially stronger, it is smooth-sailing local businesses that achieve growth momentum in the long run.