Investment in 2005 made a strong impression. What is the key for that result?
Vietnam has never had such an impressive achievement in mobilizing investment, whereby total investment was equivalent to 39% of gross domestic product (GDP). In the 7th and 8th Party Congress resolutions we targeted 30-32% of GDP. Last year, total investment reached VND326tril (US$20.375bil), in which foreign investment accounted for 17%, private sector 32%, and non-state sector 49%.
The key factor is the investment environment. In 2005 many important policies took effect. The Enterprise Law positively promoted domestic investment, and some points of the Law on Foreign Investment were perfected, reflected through newly-issued guidance documents. In addition, the state implemented some measures that brought about significant changes related to land policy, seaports, customs, and particularly administrative formalities.
Based on the results of 2001-2005 economic-social development, the party and the state have set higher targets for the next five years. What do you think about those targets?
Looking back on the 2001-2005 period, we have passed an important stage, concluding 20 years of Doi Moi. Our economy has gained high growth rate for the past 15 years, averaging 7.5%/year. This is also the grounds for us to strive for higher economic growth rate in the next five years, from 7.5-8%. Economists say that if conditions are favourable, we may achieve a higher target, over 8%.
This is a very big goal but apart from economic development, Vietnam has to pay attention to social and environmental factors. The pillar of the next five years is based on economics, social issues, and the environment. These three factors must be synchronous, harmonious, and develop in a sustainable manner.
To achieve high and sustainable growth, the core is our inner strength. I think that internal force is always a decisive factor.
First of all, we have to take advantage of capital, talent, and especially human resources. To realize this we have to implement sound policies to encourage the development of all economic sectors, especially the private sector. If each citizen, each private company wants to enrich themselves and are facilitated to do so, they will contribute to the common growth of the country.
Once again I emphasise that exploiting resources is the most important factor. Of course we also have to exploit the resources of the state, state-owned businesses, and foreign investors. If we can do this, the new targets, though they are higher, will be within reach.
Could you forecast the development of the economy in the next five years statistically?
As a manager, I estimate that total investment in the coming time will be around 40% of GDP, totaling US$130-140bil in the next five years. 35% will be foreign capital and 65% domestic. In particular, the private sector will account for 53-54%, much higher than the current rate.
Many foreign economists say that in the next five years, Vietnam will attract investment at a level much higher than the past five years and the country may repeat its 1997 peak, when we drew $9bil.
Will the factors promoting sustainable economic development be sufficient to ensure the development you have predicted in the next period?
Our policies and orientations show the appropriation and ensure the results that we expect. First of all, our economic laws have created a stable legal framework that has assured investors. Secondly, we have development orientations; specifically we have consulted the business community and investors about our development plan for the next five years.
The panorama of investment is good but there is still a clear difference between provinces and regions in attracting investment. What are your comments about this?
Investment attraction depends largely upon the point of view and vision of provinces and cities. For example, Vinh Phuc Province does not have a seaport, import-export advantages, or infrastructure but its investment growth is high, especially in industry.
Binh Duong is another example. This province does not have many advantages but its growth in investment is very impressive. A notable example last year was Hanoi. After a quiet period, last year the capital ranked top for foreign investment.
The simple answer is a change in the way of looking at administrative formalities and in areas that were restricted to investors before. In this regard, I think Hanoi will continue to rank among the top destinations for foreign investment in subsequent years.
The lesson is: a one-stop mechanism for administrative formalities, and local authorities creating favourable conditions for production and business as the most important factor for investors. For example, leaders of Vinh Phuc Province directly met with investors and considered the local Department of Planning and Investment and management boards of industrial zones as centres to combine and promote investment. Investors have the right to more deeply participate in policies. Hanoi is also going in this direction and has gained initial success.

Source: Thời báo Kinh tế Việt Nam, 26/01/2006