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Vietnam business still on US radar screen   2009-09-26 - VietNamNet/VIR

 

American investors’ interest in Vietnam remains high despite the economic crisis, says US ambassador Michael Michalak.  Though the global economic downturn has had a negative impact on foreign direct investment (FDI) all over the world, US investment is likely to stay strong.

“I can say that the interest on the part of American companies in Vietnam remains very, very high,” said Michalak.

A newly-released Ministry of Planning and Investment study reports that the US was the largest foreign investor in Vietnam for the first eight months of 2009, with registered capital of $3.95 billion for 21 new projects,  Ten more projects raised their investment capital.

Michalak said that in addition to recent large investment in semiconductors and fabrication plants, wind turbine plants and ports, US companies arelooking at the IT sector. “I just had four or five IT company representatives at my house for a reception and they told me about many plans.  There are some very interesting things happening for Vietnam in the future,” said the American ambassador.  For example, some companies plan to use Vietnamese software in various IT functions around the world.

Another well-informed American, Roberto Herrera-Lim, director of the Eurasia Group, said American investors’ interest in Vietnam has substantiallyincreased over the past three years. “The interest is coming from a wide range of sectors, from consumer and industrial product manufacturers to retailers,” said Herrera-Lim.

In Herrera’s view, there are two major selling points for Vietnam.  First is the reasonable cost of labor, an advantage for exporters.  Second is the still relatively untapped domestic market. “American or western investment in Vietnam has the potential to expand greatly beyond just the real estate and financial sectors in coming years,” he said.

Murray Hiebert, senior director of the American Chamber of Commerce’s Asia Department recently told a group of Southeast Asia journalists visiting Washington, DC, that Vietnam is the favourite investment destination in the region for many American firms because of the nation’s determination to host foreign investment.

Hiebert said that at one time Intel was thinking of investing in Thailand and Indonesia. However, it went with Vietnam because Vietnam was more willing to give the firm what it wanted. “Vietnam is pretty serious, andmore companies are going to Vietnam despite concerns over inefficient infrastructure, corruption and a shortage of good engineers,” said Hiebert.

Experts have emphasized that the global crisis reduced American investment throughout emerging markets, and investors are now more selective and careful. Regarding prospects for US investment in Vietnam, Herrera-Lim said investors’ impressions of Vietnam’s economic fundamentals remain positive.

However, he said, Vietnam faces a lot of challenges.

“For these positive impressions to translate into real investments, Vietnam must convince the world that it is building the infrastructure that the country needs to be competitive, that macroeconomic management is improving, the rule of law is being developed and that corruption is declining,” said Herrera.

Herrera added that the top two concerns of American investors about the business climate in Vietnam are infrastructure development and corruption.

Ambassador Michalak agrees.  “Vietnam’s reforms are attractive to foreign investors,” he says.  “The key to going forward is going to be whether or not Vietnam continues the pace of reform that it has followed up to now.”



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