The first agenda item was the presentations of the 5 Consortium members (Britcham, Amcham, KoCham, Japanese Chamber and Eurocham) followed by a paper from the Singapore business group on behalf of all the associate chambers.
The common themes were around sustainable development, swift implementation of Power Development Plan 8 (PDP8) and the implementing regulations, including the need for a bankable Power Purchase Agreement, and Coordinated implementation of the Just Energy Transition Platform (JETP).
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Britcham also advocated for the development and implementation of Extended Producer Responsibility (EPR) and promoting a circular economy in plastic waste management and use of recycled plastics (PCR).
Britcham further emphasized the UK’s support for the development of an International Finance Centre in Vietnam. Vietnam should also improve the capacity and conditions for growth in line with international standards and practices and creating the conditions and regulations to achieve emerging status for Vietnam’s Capital Markets and the importance of adoption of IFRS.
Administrative procedural reform was another common theme and the need for further reforms to better serve business and the community. Specific recommendations included removing advertising pre-approval, strengthening e government and simplifying the licensing process for trading activities and consistency between Central and local government. Other issues were regulatory challenges such as foreign exchange control, licensing and the need for consistency and predictability. Travel restrictions and the visa regime in the context of tourism and attracting global talent to support the development of the work place were mentioned by several speakers.
Amcham emphasized the need to remove current bottlenecks, promoting sustainability and a clean economy, access to renewable energy, especially in Industrial Zones. Amcham also spoke about the need for good policies for health and wellness. The rapidly expanding demand for pharma products is driven by improved service access and wider healthcare coverage rising incomes and better health awareness, whilst the approval process for impost and distribution lags behind. Brticham recommended the recognition of international appraisal results to accelerate drug registration locally. Amcham further encouraged the Government to work towards upgrading the status of Vietnam’s capital markets to Emerging Market from Frontier Market status. This would give greater access to international capital.
The Korean Chamber’s no. 1 issue was the need for rapid measures to resolve the impact of the Minimum Global Tax adoption, on major Korean companies. Kocham also re-iterated the need for a stable energy supply especially in Hi-tech parks. They further highlighted the need for L & G energy terminals and called for revisions to the VAT laws and regulations and the speeding up of VAT refunds. Other issues raised included simplification of environmental impact approvals, the need for collaboration to strengthen the competitiveness of the Vietnamese material, components, and equipment manufacturers- an issue long heralded by the Government of Vietnam at VBF meetings, and the need to eliminate M & A approval procedures.
JCCI emphasized three points: the speeding up of business licenses and permits, to end practices that request investors to fulfill unreasonable conditions, and submit documents that are not in accordance with laws and regulations, the need to revise the VAT law and also stressed the need to minimize the impact of the GMT. With regards to the Economic Needs Test the need for a domestic regulation to abolish the ENT and replace it with regulations that comply with CPTPP.
Eurocham submitted a mini white book with a 32 page submission with recommendations from their 20 sub-committees. Their 5 minute summary focused on the need to champion green growth and address plastic pollution urgently. The need to align PPDP* and JETP, which is not yet effective, a 2 year phase in for EPR was also requested,. Eurocham also reiterated the challenges of the pharma sector, visa policy, and the need for international standard labour agreements.
The associate chambers raised many similar issues to the Consortium members with a strong focus on accelerating e government and modernizing procedures for investors by:expanding e portals and on line submissions, adoption of e signatures, encouraging email communication and reliance on use of paper. Improving and simplifying the legal framework for foreign invested enterprises to list on the local exchanges, as current practice appears to be time consuming and uncertain.
Intel, Samsung and Bosch were then invited to speak, as important FDI partners, on ways to improve the investment environment.
Samsung emphasised that they have invested US$ 52 billion to date and have committed at least IS$ 1 billion additional investment per annum. They urged the Government to create a new investment incentive regime and a need for a decree on support incentives. They urged the Government to consider a pilot for incentives for high tech investments such as semi-conductor, and AI and simplify administration procedures.
Bosch – employ 6000 workers and have 3 R & D centres but stressed the landscape is very competitive for FDI and they had several recommendations which included the need for human capital development, and urgent training for the semi-conductor and chip manufacturing. They also highlighted Conflicts in procedures which cause delays and loss of confidence and urged improvements in counterfeit enforcement.
Intel – made a telling statement that semi-conductors were at the forefront of the upgrading of the Vietnam – USA comprehensive strategic partnership and highlighted the opportunity for Vietnam.
Papers were then presented by the Human Resources, the Infrastructure and the Capital Markets working groups.
HR WG focused on international skills transfer, slow work permit applications and approvals, the need for short term work permits up to 6 months and suggested a minimum wage for those applying for work permits.
IWG pointed out the transfer of Phu My 2 and 3 power projects have recently been or will be finalized this year, which should let the Government see the benefits of bankable BOT projects. They repeated the need for a development framework for energy, In order to attain bankable projects for PPP projects they suggested 4 options: laws and regulations governing PPP, standard form documents (not recommended), negotiations prior to finalisation and submission of feasibility studies, and regulations laying down government red lines.
Capital markets WG including Environment and ESG financing: recommendations included reviewing climate change reporting and introducing bio diversity credits. The government must address urgently the E in ESG, on Green Finance the need to develop options to harness and direct financial flows, develop Vietnam’s national taxonomy, and address taxation and other matters raised by Vietnam’s partners.
Short speeches were delivered by companies implementing green growth, these being Boston Consulting Group, EREX, Heineken and Coca Cola.
BCG focused on a need for a framework for accelerating Green Growth and a climate policy. Recommendations included accelerating green policy initiatives and tax incentives; creating a green eco system, reinforcement international cooperation, and the need to create regional and local clusters.
Erex were advocating the benefits of bio mass to help accelerating the circular economy. They commented on the low feed in tariff in Vietnam and the challenges to financial viability. They called for the speeding up of investment procedures for bio mass projects, in particular and addressing the procedural challenges.
Heineken raised the issue of access to renewable power and reusing treated water.
Coca Cola raised the issue of water security, re-usable packaging and the recycling of plastic bottles.
In response to all the (papers and presentations) his excellency Prime Minister Chinh gave a comprehensive response. This included the following points:
Accelerated efforts to fight corruption and the Party and the Politburo working together with business, commerce and the people.
He appreciated the straight forward comments from the chambers, working groups and business. He mentioned 3 common interests: listening and sharing understandings, sharing a vision and actions for growth, the need to work together, win together and grow together.
The rapidly changing environment is creating more challenges than opportunities and he wants to change that balance.
Several rating agencies have improved their ratings for Vietnam. This years GDP target of 6 to 6.5%is achievable if supported by the FDI sector. Last year Vietnam achieved a record FDI of US$ 36.6 bn. Vietnam also invested US$ 2 bn overseas in 2023. However, the Govt. recognizes the need for improved efficiency and productivity, the need for improved administrative procedures, and reduced costs of compliance, He also commented on the levels of technology in many businesses (low) local content (low) and the meagre level of green tech. There was a recognition of the need for foreign expert businesses to improve quality of investment in green growth, including training and governance.
Lessons learnt included keeping close track of and the need to institute policies in line with the developed world, review and make changes to suit the actual situation, the need for higher investment absorption, the need for green and circular economy knowledge. These are needed to help Vietnam achieve high mid income status by 2030 and high income status by 2045.
The government and the country need to focus on year by year improvement to increase sustainable development, control of Government debt, focus on people, security and social welfare, a reduced poverty level and putting people at the centre of development. The country wants to maintain its independence, its bi-lateral neutrality and maintain its culture.
He commented on the fact that Vietnam now has an aging population and the potential impact going forward. The government would like a join with FDI companies to put people at the centre, to improve social welfare and equality, and green growth and digitalization.
The Prime Minister made reference to the need for food security, clean rice field cultivation, the need to develop a system for carbon credits and trading these and the need for FDI to pioneer green growth. He stated that we need to deploy models and plans to rejuvenate Vietnam’s growth model.
He mentioned the required boosters that are needed: Technology transfer to foster innovation exports and foreign consumption; sharing experience and policy consultation with development partners; financial support for innovative projects and HR training and governance.
For the Vietnamese side protecting the legitimate rights of foreign investors; stable development in FDI and adapting to climate change and an aging population, assured political stability and policy stability; and energy stability of supply.
Business needs regulatory reform to match green growth; green infrastructure; administrative reform to reduce the cost of compliance; trust and sincerity; transparency and disclosure to combat corruption.
I believe this was a constructive and productive meeting and I assume the new format will become the norm in o0rder for the VBF to maintain its relevance from a Vietnamese perspective.
It also left me feeling how much the VBF has accomplished in its 25 year journey and I am pleased to have been part of that journey from the beginning.
