The Hanoitimes - Sustainable growth and energy policy, financing investment in infrastructure or improve legal environment… the issues of European chamber of commerce in Vietnam (Eurocham) speech that need to be addressed to substantially enhance Vietnam’s sustainability and competitiveness in global trade.
At the midterm Vietnam business forum 2017, Vice Chairman of Eurocham in Vietnam Tomaso Andreatta also speech five issues that need to be addressed to substantially enhance Vietnam’s sustainability and competitiveness in global trade, and benefit the European business community in Vietnam.
The first one is sustainable growth and energy policy. Vietnam's government can focus its industrial policy of completing the supply chain with processes that are environmentally friendly and have adequate recycling facilities. EuroCham offers to the Vietnamese Government the example and support of the European experience and technology in energy conservation and efficiency, in renewable energy, in clean production.
Vice Chairman of Eurocham in Vietnam Tomaso Andreatta (right).
OECD governments and consumers are becoming more discriminating in terms of the products they accept to buy, and they choose the ones produced with processes that are environmentally friendly and where labour practices are most comparable to the home standards.
Renewable sources of energy may have a smaller scale than traditional alternatives but they have a much faster implementation time, and they do not constrain the country to a long term commitment to the same source of energy.
The second issues is financing investment in infrastructure. Economic growth and urbanization are increasing demands for public infrastructure for goods and services. However, the State budget is only able to meet a small part of Vietnam's infrastructure needs and declining ODA funds are not sufficient to complement the shortfall.
The balance has to come from private investment, through better Public-Private Partnerships (“PPPs”) that balance the risks and are bankable for international companies, with public bids that are transparent, timely and fair, and through the full privatization of the market.
Local solutions to mobilize funds for growth from underneath family “mattresses” or “the brick”, where a new bubble is brewing, come from enhancing transparency in the capital markets, extending the fields of investment of insurance companies and pension and insurance funds to infrastructure bonds, as well as giving them clear and simple rules and implementation.
The third issues is improve legal environment. According to Vice Chairman of Eurocham in Vietnam, even though Vietnam has improved its legal framework and the enforcement of IPR, the enforcement of IPR laws remain a concern for European and Vietnamese businesses alike. EuroCham therefore calls on the Vietnamese Government to ensure that trademark and copyright infringers face strongly dissuasive legal sanctions for IPR infringements, including when operating though internet, and that Cease and Desist Decisions are immediately enforceable.
Since investors in Vietnam generally choose to provide for dispute resolution by international arbitration, especially for large transactions, Eurocham wholeheartedly suggest to the Vietnamese government to actively encourage the courts to enforce international and local arbitration awards.
Eurocham also recommend to phase out the concept that a “contract is governed by a specific international law but is governed by Vietnamese law in case of conflict with the fundamental principles of Vietnamese law” as it creates a high level of uncertainty and undermines the whole concept of allowing both parties to freely choose a specific, well suited, legal system to govern their contract.
The four issues is fourth industrial revolution. If Vietnam wants to catch up to the present and move to the future, it has to make clear choices to openly push for what will become the industries of the future. Beside learn from other countries, Vietnam has to allow the private sector to run its own bets, since some will succeed and some not, but the country as a whole will benefit.
In addition, if Vietnam chooses to be the one ASEAN country where electric automobile and motorcycles are manufactured, Vietnam will emerge from its “me too” follower status to lead at the forefront of the automotive and clean energy sectors. This will also open the way to produce batteries for buildings and cities, to complement intermittent renewable energy. This has to come with a plan to recycle used batteries.
Vietnamese are on the one hand highly proficient with mobile phone technology which could make them leading consumers and opinion leaders but on the other have limited specialized job skills to harness this potential into the companies, so more effort needs to be made in vocational training and in ensuring that the schools and universities teach more relevant subjects, and encouraging independent thinking. More can be done to attract international talent and keep it working here and to convince those many Vietnamese who go to study abroad to come back home to work.
The last one is coordinate with provinces to ensure uniform application of laws and policies. Many investors in Vietnam find more problems in opening their facilities from administrative challenges at provincial level than at national level.
According to Tomaso Andreatta, this is due to the non-uniform application of laws and policies with regard to taxes and customs, in approvals to use the land or other requirements.
Provinces are competing for investment and they should be as open and transparent as possible, and coordinate with the central government to ensure that investors with projects in different provinces are treated consistently. It is in the Provinces’ interest to go further than the FTA requirements, for example by inviting international bidders for procurement, thus securing better quality, more variety and new sources of funds.