1. Economic outlook of Viet Nam today – and what are the future prospects for the country?

After three decades of implementing the renewal (“Đổi mới”) and international integration policies, Viet Nam has become a dynamic economy. From a less developed country at the beginning of the renewal, Viet Nam has now become a middle–income country. This rapid development started due to economic reforms launched in 1986 and the rise has been continuous ever since. Over the last few decades, Viet Nam’s economic growth has been one of the fastest in the world. The GDP rate in Viet Nam has experienced a stable growth, averaging 6.46 % a year since 2000, GDP per capita at US$ 2,343 in 2017. The economic structure shifted positively towards modernization and industrialization. In 2017, the proportion of agriculture, forestry and fishery in GDP was 18,14%, processing and construction industry accounted for 36,37% and service represented 45,49%.

Aiming at becoming a modern industrialized country, Viet Nam has been stepping up its reforms as well as proactively integrating into the world. In order to improve its competitiveness, maintain macroeconomic stability and ensure an increasingly equitable and transparent business environment with a view to shifting to a more sustainable model of growth, Viet Nam is intensifying its economic restructuring, focusing on 03 major areas, which are public investment, banking system and state-owned enterprises. Viet Nam has been making efforts to complete the market-economy mechanism, develop high-quality human resources and modernize the country’s infrastructure.

Viet Nam is proactively integrating into the world under the guidelines of being a friend, a reliable partner and a responsible member of the international community. The country has entertained trade and investment cooperation with over 220 countries and territories, signed over 90 bilateral agreements, nearly 60 investments and promotion agreements, 54 double taxation avoidance agreements with countries and organizations, including FTA with major economies, Viet Nam is expected to become an important link in an international chain integrating 55 economies, including 15 G20 members.

The external sector continues to be an important driver of growth. Export value in US dollar terms is estimated to have grown 8,6% in recent years, outperforming other countries in the region. Major products, such as textiles and garments, footwear, furniture, hi-tech and high-value products such as mobile phone, computers, electronics, automobile parts etc. have also maintained rapid growth and accounted for the largest share of exports.

Structural reforms will continue to shape economic reform to 2030 so the country can better prepare for its integration into global market.

2. Which kinds of business opportunities are there for Finnish companies in Viet Nam? Please, also explain us which kinds of investment opportunities there are for Finnish companies in Viet Nam?

Located in the centre of ASEAN, close to other major markets in Asia, Viet Nam is the third largest market in Southeast Asia and one of the fastest-growing economies in the world. With over 95 million increasingly high incomers as customers, Viet Nam is a very interactive market for both Vietnamese and foreign enterprises. The Vietnamese Government has committed itself to providing a transparent, favourable and fair investment environment for foreign investors. A number of important legal documents have been enacted such as the Law on Investment, the Enterprise Law, the Housing Law, the Real Estate Business Law, the Decree on Public Private Partnership (PPP), the Decree on Securities and many other laws are being developed and promulgated with specific preferential policies.

Viet Nam has been an investment destination for 116 countries and territories around the world, tops of the list are the Republic of Korea, Japan, Singapore, Chinese Taipei, The British Virgin Islands, Hong Kong and the US. As of August 2018, there were more than 26,500 FDI projects with registered capital of more than 334 billion USD, realized capital of approximately 184 billion USD. Viet Nam has 1,188 investment projects in 70 countries and territories with a total registered capital of nearly $ 22 billion. In particular, Laos is the leading region with $ 95.19 million, accounting for 30.4% of total investment, Australia ranked second place, then Slovakia, Cambodia, Cuba, Myanmar... but there is not yet any investment project in Finland.

Foreign investors may decide to select a proper investment form, appropriate to their own business activities, comprising: i) Investment in establishment of a business organization; ii) Making investment by contributing capital, buying shares, or buying capital contributions of business organizations; iii) Investment under Public-Private-Partnerships contracts (PPP Contracts); iv) Investment under BCC (Business Co-operation Contracts).

In the coming time, Viet Nam will prioritize the attraction of foreign investors investing in high and advanced technologies, environmentally-friendly technologies, clean and renewable energy, manufacture of medical equipment, provision of health care services, etc., which also is the strength of Finnish businesses. In addition, Viet Nam will complete mechanisms and policies to create new motivation for attracting and using foreign investment in industrial parks, export processing zones, economic zones and hi-tech parks. Regarding the market, partners, we need multi-lateralisation, diversification of foreign investment attraction from potential markets and partners, concentration on transnational corporations that held the source and advanced technology, modern management, etc.

3. How Viet Nam has benefited from the Free Trade Agreements it has signed?

Until now, Viet Nam has taken part in 16 Free Trade Agreements (FTA), which makes it become one of the countries with the most FTAs in the world. These FTAs include 10 signed and implementing bilateral and multilateral FTAs, i.e. ASEAN Free Trade Area, ASEAN – South Korea, ASEAN – Japan, ASEAN – China, ASEAN – Australia – New Zealand, ASEAN – India, Viet Nam – Chile, Viet Nam – Japan, Viet Nam – South Korea, Viet Nam - Eurasian Economic Union; 01 signed FTA, i.e. the Comprehensive and Progressive Agreement for Trans-Pacific Partnership; 01 completed-negotiating FTA, i.e. Viet Nam – EU FTA and 04 on-going-negotiating FTAs, i.e. Regional Comprehensive Economic Partnership, ASEAN – Hong Kong, Viet Nam – European Free Trade Association, Viet Nam – Israel.

These free trade pacts have brought many benefits to Viet Nam. First, these FTAs help set up sound trade ties with other regions and they serve as a boon for domestic products to break in into foreign markets. The export value over the past more than 20 years has increased by 40-fold and amounted to 213 billion USD in 2017. Second, these FTAs, especially the new generation FTAs, have high standards and commitments on fairness, stability, transparency, etc., which force Viet Nam to act to improve domestic business and investment environment, infrastructure, administrative reforms, and thus, help attract foreign direct investment (FDI) to Viet Nam. Third, these FTAs also help Viet Nam draw the interests of highly qualified and skilled laborers from abroad to work in Viet Nam. Vietnamese enterprises also have opportunities to acquire advanced technologies from other developed countries. These factors hence help increase the competitiveness of the economy, contributing to Viet Nam's deepening participation in regional and global supply chains. Fourth, when entering into Free Trade Agreements, the barriers to administrative procedures are also minimized and simplified, enabling domestic enterprises to step into the international market. Fifth, the large markets of the FTA partners help Viet Nam expand and diversify its market and raw materials supply for export, hence, reduce the dependence on a certain market. Sixth, these FTAs also help create more jobs, improve people’s incomes and the quality of human resources. The new generation FTAs also include commitments on environmental protection that assist the country to develop towards sustainable growth.

4. Which regions or places you would recommend tourists to visit and which kinds of leisure activities you have to offer in Viet Nam?

“Astonishingly exotic and utterly compelling, this is a country of breathtaking natural beauty with a unique heritage, where travel quickly becomes addictive”. This is what one of the most popular travel book, Lonely Planet, has to say about Viet Nam.

And they are right. Viet Nam is an exhilarating country to travel. Photogenic streets, epic landscapes and exquisite food are just the start of what you will find here. A nation on the move, Viet Nam balances its own take on modern luxury and urban culture with a fascinating heritage and strong traditional values. One of the Viet Nam’s strongest draws is the diversity of its natural beauty and landscape: spectacular mountains, valleys and bays, sandy beaches...

In the cities, overflowing markets and ancient pagodas sit just around the corner from hip cafes and sleek rooftop bars. In the countryside, life still follows the rhythms of the rivers and the rice harvest, and there is always time for a coffee on the side back. And all down Viet Nam’s S-shape coast, you will find islands, big and small, just waiting to be explored. With thousands of fine dishes throughout the country, food is one of the most enjoyable experience for travellers in Viet Nam, especially as its cuisine is a reflection of the country’s culture and lifestyles.

Top tourist attractions in Viet Nam are: Ha Noi, Viet Nam’s capital is the frenetic heartbeat of the nation and a place that befuddles travellers as much as it charms them; Ha Long Bay, in Northern Viet Nam, is dotted with 1,600 limestone islands, one of the world’s most spellbinding see views, declared a UNESCO World Heritage Site in 1994; Ho Chi Minh City, the buzzing and crazy commercial hub of the country; Hue city – an ancient capital of Viet Nam during the reign of the 19th century Nguyen emperors; Phong Nha - Ke Bang National Park, World Heritage-listed, is one of the world’s best caving destinations and many places for sandy fun like Da Nang, Nha Trang, Mui Ne...

October 22, 2018

Finncham interviewed H.E. Mrs. Pham Thi Ngoc Bich, Ambassador of Viet Nam