Hanoi has shown strong will in addressing concerns of foreign businesses and ensuring an ideal investment environment for them to commit to long-term operation.
Vice-Chairman of the Vietnam Association of Foreign Invested Enterprises (VAFIE) Nguyen Van Toan
Vice-Chairman of the Vietnam Association of Foreign Invested Enterprises (VAFIE) Nguyen Van Toan told The Hanoi Times of his observation over Hanoi’s efforts in attracting foreign direct investment (FDI) and grasp opportunities to recover in the post-pandemic period.
What is your view on Hanoi’s initiative to hold a dialogue with foreign businesses in the city?
It is not a new move but, in the past, Hanoi has been actively responding to feedback from foreign businesses and investors. The city’s leaders are monitoring closely the situation of the business community to provide support programs accordingly and create further favorable conditions for them to thrive. Such efforts have been welcomed by foreign businesses.
Since the Covid-19 pandemic broke out last year, Hanoi has intensified the frequency of holding dialogues with the businesses, and for me, this shows a strong will from the city is gaining a better insight on the issues that the businesses are facing for timely intervention if needed.
At the dialogue, representatives of businesses asked for easing of PCR testing frequency for drivers, simplifying procedures for the entry ò foreign experts, or more tax incentives. What is your assessment of such proposals?
They are all the necessary steps. Not just foreign companies in Hanoi, but the serious Covid-19 situation and subsequent restriction measures are causing huge risks for businesses’ operations in the country. Difficulties come from all aspects of input materials, logistics, market access, production, or shortage of workforce.
However, to date, the situation has improved significantly. The Government’s Resolution No.128 on safe and flexible adaptation to the Covid-19 pandemic was issued at the right time for Vietnam to shift its Covid-19 strategy to adapt to a new normal.
While many provinces/cities have put the policies into good use, many businesses still voice their concern over difficulties in the logistics activities across localities.
As of the present, Hanoi has attracted over 6,600 foreign projects with total investment capital of $48.7 billion. Last year, Hanoi ranked in the top three nationwide in terms of FDI attraction with $3.83 billion, and around $1.28 billion in the first nine-month period. How do you see this result?
Under Hanoi’s socio-economic development program for the 2018-2020 period, the city identifies three breakthroughs for growth, including administrative reform, infrastructure development, and high-quality human resources. Such measures have laid the foundation for a much-improved business environment and resulted in higher FDI inflows.
On the other hand, Hanoi has promoted investment activities and adopted measures for effective utilization of both domestic and foreign resources for development, in which the focus is on simplifying administrative procedures to save time and cost for businesses.
Hanoi in the past four and five years had seen its ranks moving into top 10 localities in terms of the effective administrative system and attractive destination for foreign businesses.
While Hanoi has gradually contained the fourth Covid-19 outbreak, there remain high risks of further infections. What are your recommendations for Hanoi to further pursue the two-fold goal in general and FDI attraction in particular?
Hanoi is in the process of drafting an economic recovery plan, which for me, should pay attention to creating breakthroughs and driving forces for future growth, including digital economy, hi-tech, or tourism. Besides, there should be a long-term platform for Hanoi to develop in a sustainable manner, especially in working on a digital government and institutional reform.
Vietnam is moving in the right direction in adopting a “safe-living with the Covid-19” strategy. There is no other option for Vietnam than to reopen the economy by ensuring safe and flexible adaptation to the situation. In this regard, Vietnam should push for a higher vaccination rate, raise public awareness on 5K and the Covid-19 green pass.
Tourism is an important part of this process, for which Vietnam should work with other countries in recognizing each other Covid-19 green pass.
What are the potentials of Hanoi to further attract FDI?
Hanoi as the country’s political-economic hub has huge potential for FDI attraction. At present, the FDI inflows are mainly concentrated on manufacturing and processing, construction, real estate, or services.
However, Hanoi has room to become an innovative center, and Samsung’s R&D center is the right step forward.
In the coming time, Hanoi should continue to address issues related to environmental pollution, traffic congestion, or the lack of quality human resources.
Another direction for Hanoi is to strengthen cooperation with neighboring localities to utilize their respective advantages in terms of the workforce or supporting industries.
With the capital’s orientations towards technology-driven economic development and new actions to support business recovery, more new opportunities are expected to come for potential investors in Hanoi.