Foreign firms air concerns

Foreign investors in HCM City said though the local business climate was good, there were some concerns for US businesses.

Speaking at a 200-strong seminar held in HCM City yesterday, Christopher C Twomey, chairman of the American Chamber of Commerce and Industry said that in 2010 exporters had their products held-up by customs procedures for almost three days, importers for almost four.

“This does not take into account slowdowns due to port congestion; it is simply the days necessary for clearance,” he said.

For companies using complex multi-country production and integrated supply chains, these delays were costly since they created bottlenecks downstream, he said.

For investors trying to ship perishable or high-tech products, the delays could be catastrophic, he pointed out.

“Despite the tremendous effort Viet Nam has made to lower the regulatory burdens faced by businesses such as the Prime Minister’s Administrative Procedures Reform Action Plan, otherwise known as ‘Project 30′, these reforms have benefited the domestic private sector much more than FDI companies.”

Foreign operations still waited twice as long to be officially legal and suffered twice as many regulatory inspections as Vietnamese businesses, he said.

Other concerns included macroeconomic stability, corruption, workforce development, and education and training to ensure qualified workers, he said.

Of investors who shipped goods regularly, 70 per cent felt they had to pay bribes to expedite customs procedures, testifying to the urgency of getting through customs quickly, he added.

Han Jae Jin from the Korean Chamber of Commerce and Industry in HCM City said labour shortage, especially of skilled workers, and labour disputes were among the biggest problems for Korean businesses. Foreign investors lamented that it took six months to get a licence, he said, urging the Government to speed up the licensing process.

The shortage of electricity and an increase in electricity prices were also hindering businesses, he said.

Lu Thanh Phong, deputy director of the city Department of Planning and Investment, blamed the delays on licensing offices’ low capability and professionalism.

Han called for simplifying customs procedures and using e-customs in many provinces and cities.

Erdal Elver, deputy chairman of Eurocham, said protection of intellectual property was a major factor in attracting large investments.

“Public-private partnership projects need to be a focus in the coming time when ODA loans are limited to developing countries, including Viet Nam,” Womey said.

Many large projects like the underground and a deepwater port in Cai Mep were under way, he said. “More infrastructure investment will be needed to support this increased FDI and resulting economic growth.”

An expanding industry consortium would collaborate with top technical universities in Viet Nam to improve their electrical and mechanical engineering curricula, considered the “bread and butter” degrees for manufacturing, he said.

For training for manufacturing technicians, the Asian Development Bank’s US$70 million “Skills Enhancement Project” loan to Viet Nam would be a very important public-private partnership and co-operation activity, he said.

The Ministry of Labour, Invalids, and Social Affairs, education and training institutions, business associations, and companies needed to co-operate closely to establish programmes that would produce the high-quality workers that a modern Vietnamese manufacturing industry would need, he said. — VNS

Tags: Foreign firms in Vietnam