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Vietnam: More efforts needed for better investment environment
(Thai Press Reports Via Thomson Dialog NewsEdge)Section: Regional News - To improve the effectiveness of foreign investment attraction, the Government should issue a legal framework soon on foreign investment incentives applied throughout the whole country, taking into account the specific features of each local in order to prevent situations where each area issues its own regulations.
Vietnam's figure of US$5.8 billion in foreign direct investment (FDI) in 2005 showed the great efforts by the Government, the Ministry of Planning and Investment and localities in promoting FDI attraction. However, to continue achieving success, much more needs to be done in 2006, particularly in terms of improving the investment environment.
According to economic experts, despite obtaining satisfactory results in foreign investment attraction, Vietnam still lacks experience in this field due to limited inner strength and shortcomings in foreign investment policies.
For instance, some differences between the Foreign Investment Law and other laws have caused a lot of difficulties for investors about an unstable legal environment.
Meanwhile, the no retroactive principle fails to ensure the consistency in amendments, supplements and promulgations of laws and by-law documents such as decrees and circulars.
This, in fact, has created frozen periods of time for law enforcement to attract foreign investment. In addition, limited knowledge, ineffective law enforcement and increasing competition in FDI attraction policies and local policies beyond the legal framework have created unhealthy competition, adversely affecting the national interest and creating troubles for investors.
Recently, the Prime Minister has asked 31 provinces and cities to abolish regulations different with common regulations on investment incentives.
Another shortcoming in foreign investment attraction is that investment promotion and advertising is limited. In addition, the legal framework for building procedures to operate the .foreign direct investment promotion fund has not been developed, causing confusion for localities trying to finalise such work.
To improve the foreign investment policy to lure more foreign capital in the integration and fierce competition process and to effectively implement the Common Investment Law and Unified Enterprise Law, which will be effective from July 1, decentralised administration and licence granting should be further strengthened. The Government should issue a legal framework soon on foreign investment incentives applied throughout the whole country, taking into account the specific features of each local in order to prevent situations where each area issues its own regulations.
Before issuing legal documents on foreign investment, the Government should create favourable conditions for investors and localities to submit comments in order to ensure the feasibility of policies. Principles such as no retroactive and consistency should be enhanced during the process of building and issuing legal documents. In addition, investment promotion and advertising in the region and world should be strengthened and national promotion programmes should be closely attached to local programmes to ensure unity and efficiency and improve the effectiveness of investment policies. - VOV
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