The Hanoitimes - The investment and business environment in Hanoi has been regarded as having positive and transparent transformations for the past few years. However, enterprises still expect Hanoi to have more breakthroughs with regard to investment and business procedures.
More importantly, they wish Hanoi, as the capital city of the nation, to locate itself in relation to other great economic centers of the region such as Singapore, Hongkong, etc.
Discussing with the Economic and Urban Newspaper before the inception of the “Hanoi 2017 – Investment and Development Cooperation,” Professor Vu Tien Loc, the President of the Vietnam Chamber of commerce and Industry (VCCI) shares many suggestions dedicated to advancing the investment environment in Hanoi.
Great momentums to move forward
Mr. Vu Tien Loc – President of VCCI
One year after the commencement of “Hanoi 2016 – Investment and Development Cooperation,” what are your evaluations for the investment and business environment in Hanoi?
- Looking at the past year, the investment and business environment in Hanoi witnessed many transparent and positive transformations. The Hanoi government has unified and initiated various activities to improve the business environment. Foreign investment has received good signs to further advance. Many foreign investors pay more attention to commercial corporations in Hanoi. The domestic enterprises have also felt the positive moves of Hanoi. Enterprises actively and regularly attended meetings with the city government last year. Besides, the business community expressed their satisfaction in the business investigation conducted by VCCI.
Did the Provincial Competitiveness Index (PCI) 2016 reflect correctly the competitive capacity of Hanoi last period and does Hanoi have some momentums to increase this index?
- According to the PCI 2016, Hanoi improved by 10 ranks, from 24 to 14 of the chart, also the highest rank we have achieved so far. This is a positive sign, a pleasure for Hanoi. Besides indexes that Hanoi normally achieves at high rank such as labor training or enterprise supporting services, other important indexes show signs of positive improvement such as time cost, unofficial cost, etc. All of them show that enterprises have noticed positive transformation in financial procedures in Hanoi. I hope that this trend will continue growing in a stable manner.
Nevertheless, with regard to activities to improve the current business environment, not only Hanoi but other cities and provinces are also trying their best. Other countries and centers are moving as well. Thus, if Hanoi changes itself but moves more slowly than other centers, Hanoi still has a chance of lagging behind. Another risk is that Hanoi is big, so the enterprise community is also bigger than other provinces. As a result, mobilization tends to be more difficult. However, in general, Hanoi still have a lot of momentums to move forward.
Last year, VCCI proposed to Hanoi to push up the innovations of financial procedures in key fields such as taxes, social insurance, land, etc. In addition, VCCI pointed out some challenges and burdens of procedures which enterprises usually encounter when they want to advance their business or unofficial fees, etc. In your opinion, after one year, did Hanoi solve these problems?
- Even though Hanoi improved by 10 ranks according to the PCI 2016, there are still some fields which Hanoi shows poor performances such as land interaction index or legal practice index, etc. Even in some fields that entail great developments, compared to other cities and provinces, Hanoi still lags behind. For example, Hanoi is ranked 53 out of 63 provinces with regard to time cost. The index of market participation of Hanoi is considerably high, 7,51 out of 10. However, Hanoi is ranked 63 out of 63 provinces in the whole nation. This shows that enterprises have more hopes for the greater and more persistent transformations of Hanoi. Regarding the landscape and requirements for the development of financial procedures and business environment, there are a lot of rooms for the improvements of Hanoi.
A need for strategy to timely support investors
In your opinion, what issues of development does Hanoi need to pay attention to?
- I think that Hanoi needs to have some breakthroughs concerning changes in procedures for investors. In reality, investors keep in touch and complete the whole investment procedures, land procedures in Hanoi in particular since they are very complicated, time consuming and considerably problematic when other agencies and departments are involved. Therefore, a uniform, scientific and transparent process is necessary. The city needs to prioritize to devise a reactive and supporting procedure to timely support enterprises when they encounter some challenges.
Hanoi needs to locate itself in relation to not only provinces and cities of the nation but also other large economic centers of the region such as Singapore, Hong Kong, etc. Once Hanoi sets out an ambitious plan that is comparable to other ASEAN countries’, can the city establish some standards for business environment to catch up with Singapore and Hong Kong in the following years?
Many enterprises commented that the qualities of staff and workers were a minus point in the previous year conference. So, according to your evaluations, have the situation improved and are enterprises satisfied with the current qualities of staff?
- It is true that the governmental staff is an important element, if not the most important one with the efficient organization and operation of any financial system, affecting directly to the business environment. Some notable indexes in the VCCI system are: activeness, transparency, unofficial fees, time fees. However, Hanoi is still in the bottom, showing that the qualities of governmental staff need to be improved firstly.
We need to know that the problem does not lay in the professions of the staff, since with regard to certifications and educational levels, Hanoi workers are always regarded highly. However, the most important thing is the motivation to work, the professionalism and the supporting and collaborative attitudes with enterprises. In order to ensure the mentioned points, it is necessary to select, supervise and encourage staff, especially whoever have frequent interactions with businesses.
I believe the Hanoi government understand clearly the challenges and is actively involved in the process. The 2017 topic, which is “The Year of Financial Regulations,” shows the determination of the city.
With the current speed of globalization, problems such as congestion and urban pollution are concerns of many investors as they arrive in Hanoi. Do you have any suggestions to help Hanoi solve those problems?
- I think that we need to solve the overloading issues of the city immediately in the investment phase. Hanoi needs to attract foreign investment that is of high quality and with advanced technologies. They are projects with great funding and will generate high values, high participation rate and little infrastructure or factories. Hanoi has many advantages with regard to high qualities of labor and the labor cost is considerably competitive compared to other centers of the region. Furthermore, Hanoi has more advantages compared to domestic centers to attract foreign investment because it has advanced services and has international airport.
Still, if Hanoi wants to attract this foreign investment, Hanoi has to improve more strongly the business environment. The research of VCCI shows that investors have high standards for the qualities of management in addition the qualities of infrastructure and labors. They need a transparent business environment, professional financial procedures in comparison to other normal investors.
Mr. Henry Steingass, Regional Director of South and Southeast Asia at U.S. Trade and Development Agency: Enterprises are encouraged
From my point of view, Hanoi has numerous advantages to attract foreign investment. The City has potential for development, qualified human resources with high productivity. Human resources and good infrastructures are decisive factors for investors.
Besides, I have listened to the speech of Mr. Nguyen Duc Chung – the Chairman of the Hanoi People’s Committee at The smart cities U.S. – Vietnam Conference, where the Chairman has listed Hanoi’s advantages to provide and support investors. Besides, the Chairman also mentioned a plan to improve the suburban areas.
I came to Hanoi 2 years ago and saw the remarkable improvement of transport in the city. A lot of bridges and roads have been built to connect the airport with city centers. Infrastructures is very important to investors. The Chairman has emphasized commitment for future development.
However, Hanoi is facing some challenges to continue modernizing the basic infrastructures, improving transport and dealing with pollution. On the other hand, we can see the Chairman is very open in discussing Hanoi’s issues and plans toward the future.
Mrs. Deborah Wetzel – World Bank Senior Director for the Governance Global Practice: Refer to Singapore model for reform.
The miracle development of Singapore is thanks to a complete, efficient and transparent law systems, a stable and attractive business environment for foreign investors. The process for business certificate award is very convenient and simple. For example, some projects after having business certificate had been commenced in just few months, or even in 49 days. It is the “49-day miracle” in Singapore. Hanoi needs to continue putting efforts in business environment improvements in the direction of transparency, modernity, professionalism and friendliness. These are important legal bases to develop socio-economic plan for the City in the coming time.
Mr. Nagai Katsuro – Counselor of Embassy of Japan in Vietnam: Qualified human resources are advantageous
The relationship between Vietnam and Japan in the economy and other fields could not be better during the last few years. With regard to investment, Japan has more than 1,500 enterprises invested in Vietnam and 2,500 with representative office in Vietnam.
At present, business environment in Vietnam is improving, infrastructure development is in progress, creating good opportunities for investment promotion. The Japanese government looks forward to continue cooperating with Vietnam in infrastructure development and improving Hanoi’s business environment through Nhat Tan bridge building, Hoa Lac hi-tech park, etc. Besides, many Japanese enterprises are considering invest in agriculture and retail operation in Vietnam.
Mr. Nguyen Duc Kien – Deputy Chairman of the National Assembly Economic Commission: Publicize projects for investment
Hanoi is welcoming investors to investment in period 2016-2020. The publication of portfolio is seen as the most effective way to mobilize fund for project implementation, creating momentum for Hanoi socio-economic development. In terms of master planning, Hanoi should cooperate with international experts and increase the public participation, at the same time turning to a new development trend with green architecture, green city to deal with environmental issues, as Hanoi still has many pending issues on discharged water, garbage, overcrowded in hospitals and public schools, etc.
Professor Nguyen Minh Phong, an economic expert: Acknowledge great progress
The “Hanoi 2016 – Investment and Development Cooperation” has become a touchstone marking a new era with regard to the mission to attract investment, improve business and tourism and advertise brand names, leading to more investment opportunities in the capital.
Right after the 2016 conference, the city has attempted to initiate many particular activities to push forth the year of 2017 into “a year of finance and regulations.” Together with opening a “singer-window” policy with regard to accepting and solving suggestions at once for enterprises, the city has established an executive board specializing in supporting enterprises and focusing on issues such as attracting funding, lands, consumption market, technological applications, legal assistance, counseling, and education on strategies to construct and develop enterprises or their products’ brand names. In addition, it is important to construct and apply the management system with ISO 14.000 and ISO 22.000, etc. Those efforts have contributed to improving the competitive capacities of enterprises and the management abilities of the government to enterprises.
Clearly, Hanoi has continued to demonstrate strong changes in both acknowledgement and efforts to unify in reality the management of the government in general and the investment and collaboration activities to develop in particular. Achievements as a result of the mentioned efforts are worth noting, and the “Hanoi 2017 – Investment and Development Cooperation” conference will continue to provide additional directions and motivations for the city to persistently collaborate with the enterprises community and the whole nation to continue solving all difficulties, react to market changes in a more flexible and efficient manner, and ceaselessly improve the capability and duration of economic efficiency and governmental management in the region.
Mr. Lee Jong Su – General Director of A-sen Kovi JSC: Investors see the potential
Hanoi has many important industrial complexes such as Thang Long I, Noi Bai, Hanoi south supporting industrial park, etc. With that being said, Hanoi has an obvious advantage in comparison with other provinces and city in attracting investment. By 2030 the City will have 9 million people, creating great demand in housing market and related services such as health, education, etc. Therefore, to be one of the top destination for FDI attraction in Vietnam, Hanoi has to focus on its advantages. Foreign investors will look at the City support and conditions for investment.
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