"Now that the economy is attaining high growth of 8.2%, foreign direct investment is at a record high. That coupled with its political and social stability, puts Vietnam on the threshold of enormous opportunities for business co-operation and development," said Khiem.

The Deputy Prime Minister added that the action plan would be called Enhancing Competitiveness, Making Use of Opportunities, Overcoming the Challenges of Globalisation and International Economic Integration.

Vietnam has attracted $9.5bil in registered foreign investment this year, and 41,000 new enterprises were established, bringing the total number to 200,000.

In the next five years, Vietnam plans to mobilise US$140bil to develop the economy, one-third of which is expected to come from overseas sources.

To improve the business environment in the country, the Government has passed two major laws - the unified Investment Law and the Law on Enterprises, which came into effect this year. In addition, the National Assembly passed 16 laws in its last meeting in an effort to make business laws more transparent.

Theory to practice

In reference to Vietnam, the World Bank's country director for Vietnam, Klaus Rohland, said for a law to be effective, the decrees and circulars guiding its implementation must first be in place.

Le Nguyen Minh Quang, vice chairman of the HCM City Young Entrepreneurs Association, agreed with Rohland. "There is a time lag between when a law is issued and when it is implemented," he said, adding that corrupt officials could take advantage of the confusion to extract bribes.

In response, Khiem said that once a law has been passed, the Government would speed up the issuance of sub-law legislative documents to "bring the law into life".

Oliver Massmann, a member of the Executive Committee of the European Chamber of Commerce, called for clear guidance on the establishment and operation of trading branches, which were legally authorised by Decree No 72 issued in July.

He also pointed out that a WTO working group report stated that Vietnam would allow trading branches by January 2007.

Nation ranks third

When asked to name the top five Asian countries with the best business potential in the medium (three-year) term, Japan Bank for International Co-operation said Vietnam ranked third.

One-third (159) of the 484 Japanese companies surveyed chose Vietnam, 372 chose China and 229 chose India. Vietnam, for the first time, surpassed Thailand, which was picked by 142 Japanese firms.

The main reasons given for Vietnam's attractiveness for investment were its inexpensive workforce and potential for growth and risk diversification.

The stock market has also had a good year, with market capitalisation comprising bonds and shares jumping to $10bil in 2006 - 16% of the nation's GDP, ahead of the Government's target of 10-15% of GDP by 2010.

The Secretariat Group for the Business Forum also reported that, according to its latest Viet Nam Business Sentiment Survey, 202 Vietnamese businesses said the country's business environment was relatively satisfactory - particularly because of its political stability and ability to control inflation and exchange rates.

Furthermore, 89% of those polled said they had plans to expand production in the next three years. A number of business leaders at the forum said Vietnam needed to eradicate unnecessary business licensing, cut down on red tape and curb corruption.

They also said it needed to develop the real estate market and the country's infrastructure.

Chairman of the American Chamber of Commerce David Knapp said Vietnam needed to promote private investment in infrastructure projects - particularly electricity projects and deep-water sea ports.

The meeting also looks at ways of developing tourism, which is considered to attract a sustainable, pollution-free income. Vietnam expects to earn $3.6-3.8bil from tourism this year.

Source: Viet Nam News