Viet Nam would continue to implement transparent economic policies while focusing on economic restructuring in the State-owned sector, public investment and the financial market, which would be mainly commercial banks.

Minister of Planning and Investment Bui Quang Vinh made the statement at the 29th Viet Nam Business Forum, entitled New Period for Competition Growth, presided over by the World Bank's International Finance Corporation held in Ha Noi yesterday as a part of the Consultative Group meeting of donors.

Vinh said the restructuring should be carried out with proper financial policies.

"The country would also implement a market-oriented economy to create equal competition and administrative reform," he said.

He said the country would put on the agenda improving human resources and modernising infrastructure, particularly in the transport sector and urban areas.

The plan to restructure the economy would be submitted to the Government by the beginning of next year.

The Government would also focus on creating an environment for equal competition and administrative reforms.

Keiko Sato, portfolio and operations manager for the World Bank in Viet Nam, said growth was always critical and competition grew stronger as Viet Nam became a middle-income country.

"We applaud recent statements relating to economic reform, particularly public investment, State-owned enterprises and the financial sector," she said, adding that these were vital factors for Viet Nam to maintain competitiveness.

However, difficulties had emerged in Vietnamese businesses in the past six months, she said.

International Financial Corporation regional manager for Viet Nam, Laos, Cambodia and Thailand Simon Andrews said this year had been a tough year for Viet Nam businesses as the annual business sentiment survey for the country in 2011 showed enterprise morale reaching a three-year low, dropping to much lower than the level recorded last year.

He said inflation had been high despite reducing in the past few months and necessary tight monetary policies had created barriers for small businesses as well as increasing the risk rate to the banking system

Domestic respondents were more optimistic about the ease of doing business in Viet Nam than their foreign counterparts in 12 out of 14 indicators.

Also garnering positive reviews from survey participants was the development of access to information and paying taxes.

Protecting intellectual property rights, combating counterfeit goods, access to hard currencies and land continued to receive low ratings.

After years of being highly commended, macroeconomics governance was voted one of the three most concerning business environment components.

It was however interesting that despite being directly affected by adverse economic conditions, most respondents still believed that the Government should stick to tighter monetary policies to stabilise the macroeconomy.

Respondents also recommend continued administrative reform, lower entry barriers and improvements to transport infrastructure and energy production.

Five leading solutions which both domestic and foreign enterprises agreed to propose were to improve and simplify administrative procedures, information systems, telecommunications and energy, transport infrastructure and reducing barriers to participation in the market.

The forum also heard the business circle had put its trust in the quality of policy governance as they otherwise could have been faced with macroeconomics unsuitability and governance resulting from weak management.

That was the reason that nearly 69 per cent of respondents expected to expand their business in the coming years based on their views of the country's long-term economic potential.

The rate showed that the business circle had been ready to support the Government in achieving economic restructuring targets, though the rate was much lower than last year's of 76 per cent.

In addition, results from the survey also showed that 49 per cent of 240 surveyed businesses were ready for the affects of tightening monetary policies under Resolution 11 to curb inflation and stabilise the macroeconomy.

Chairman of the European Chamber of Commerce in Viet Nam Alain Cany said the chamber's Business Climate Index had declined from 78 to 52 points, indicating a declining confidence in Viet Nam as an investment destination.

"Coupled with the 28 per cent drop in FDI through the first nine months of this year and inflation rates of almost 20 per cent, it was fair to say that European companies are increasingly concerned about the business and investment environment in Viet Nam," he said.

He added that Viet Nam's ability to remain competitive and maintain sustainable economic growth over the long term depended on whether the Vietnamese Government took action in several key areas of stabilising the macroeconomics environment, protecting investor rights – particularly in the areas of licensing – and protection of intellectual property rights.

It should also continue implementing infrastructure projects and guaranteeing reliable energy supply and improving the quality of Viet Nam's labour force by promoting higher education and vocational training and reducing and simplifying administrative burdens on all levels.

VNS