UNCTAD report on Vietnam renovation process

Dec. 4 (VNA) -- The Doi Moi (renovation) policy of Viet Nam has accelerated the country's progress towards industrialization and integration into regional and global markets, accompanied by the active participation of foreign investors, according to a report released recently by the United Nations Conference on Trade and Development (UNCTAD).

The UNCTAD report says that annual average foreign direct investment (FDI) flows to Viet Nam grew by a multiple of 16, from USD 141 million in the 1988-91 period to USD 2.2 billion in the 1996-99 period. During that short period of time, Viet Nam's share in total flows to the ASEAN countries grew seven times, from 1.4 percent to 9.5 percent, while ASEAN's share in annual average flows to Asian and Pacific developing economies contracted by half, from 48 percent to 23 percent.

Appreciating the Government's efforts to attract the investment, the report elaborates that a concerted drive to attract FDI, particularly the 1987 Foreign Investment Law, marked the first step towards industrialization and integration; the regulatory framework was further liberalized by amendments to the law in 1996, 1999 and June 2000.

It adds that other measures to encourage FDI include easier requirements for registration and the lowering of taxes and business costs, permits to foreign investors to acquire up to 30 percent of the equity capital of many state-owned firms, and the July 2000 opening of a stock exchange. The report says that the country's signature of a bilateral trade agreement (with the United States) on 13 July 2000 reflects its commitment to implement more reforms aimed at achieving greater global economic integration, including membership in the World Trade Organisation (WTO).

"To further improve the investment climate and foster cooperation, during the 1990s Viet Nam concluded 39 bilateral investment treaties, which provide additional guarantees for foreign investments, and 26 treaties for the avoidance of double taxation on income and capital (as of 1 January 2000). Under the 1998 Framework Agreement on the ASEAN Investment Area, Viet Nam - a member of the Multilateral Investment Guarantee Agency (MIGA) and the World Intellectual Property Organization (WIPO) - is committed to granting national (preferential) treatment to foreign investors from that area by 2010," says the report.