All the participants at the forum, representatives from local and foreign enterprises and international institutions, shared the same view: WTO membership will have a direct impact on foreign investment in Vietnam. However, there remains a question that needs to be answered: “How does the country take full advantage of the opportunities and minimize the challenges?"

Time to take off

Speaking at the forum, Minister of Planning and Investment Vo Hong Phuc expressed his optimism about Vietnam’s economy when he said that 2006 was the time for Vietnam to take off. He said that the high and sustainable economic growth rate attained the last five years has served as the impetus for Vietnam’s further development.

Mr Phuc went on to say that economic performance in the first months of the year had been very good, promising a high economic growth rate for 2006. In the past two months, many big investors from the US, EU and Japan have come to Vietnam to do business, and they all said that Vietnam had a great opportunity to attract foreign investment.

Talking to investors present at the forum, Deputy Minister of Planning and Investment Nguyen Bich Dat reaffirmed Vietnam’s desire to join the WTO, and the country’s plan to further renovate and globally integrate. These efforts, coupled with the commitments on opening its market will help attract foreign investment into different fields. WTO membership will create favourable conditions for Vietnamese enterprises to penetrate the world’s market and boost exports. This is one of the attractive factors of Vietnam in the eyes of investors as they can exploit Vietnam’s advantages of a good labour force, natural resources and favourable geographical position to make goods for export.

Vietnam is aware of challenges

Opening the banking market is one of the toughest points in the bilateral and multilateral negotiations. Local commercial banks have been feeling the pressure caused by the integration.

Huynh Nam Dung, chairman of the Mekong River Delta Housing Bank (MHB), one of the five state owned banks, said that the problem for all banks in Vietnam now is how to raise their competitiveness and exploit the opportunities brought about by the market opening.

Mr Dat warned that once the tariff was lifted, subsidiary policies were removed and the market was opened, some enterprises, including the foreign invested ones that rely much on the protected measures, would suffer.

Mr Dat acknowledged that Vietnam was facing big challenges in the quality of its human resources and infrastructure, while there was little time left to prepare for the post-WTO period.

How to get prepared for the global integration?

Regarding the investment environment, Mr Phuc said that Vietnam will focus on seven main issues: 1. improving the legal framework to build up the market mechanism, especially the investment and trade laws 2. Developing comprehensively the monetary and capital markets 3. Ensuring a healthy competitive market 4. Building up policies for deeper integration, ensuring the competitiveness when having joined the WTO 5. Developing economic infrastructure, creating favourable conditions for investors to invest in the transport and power sectors 6. Focusing on human resource development 7. Accelerating administrative reform.

Regarding the two most interesting issues, human resource training and infrastructure development, Mr Dat said that the government of Vietnam had raised the expenses for education and training, and focused on education socialisation, mobilising capital from different sources.

Mr Dat called on foreign investors to inject money in education, especially the big universities and high-tech zones.

As for infrastructure, Mr Dat said that the State had spent 10% of GDP on power, transport and irrigation projects. Vietnam understands that in order to maintain a growth rate of 7-8%, it will have to spend 7-8% of GDP on infrastructure. Vietnam is to issue a list of 100 infrastructure areas requiring investment.

Source: Vietnamnet, 20/3/2006