Socialist Republic of Vietnam

Not complacent with a five-year high in foreign investment last year, the Vietnamese government has pledged a series of reforms, including a further cut in costs for foreign investors.

The plan was unveiled by Minister of Planning and Investment Tran Xuan Gia in an interview with Sai Gon Giai Phong (Liberated Saigon)on the special New Year edition.

Vietnam's next five-year plan calls for a total foreign investment of US $12 billion with an annual capital disbursement of not less than US $2 billion. It means that the country should draw at least US $3 billion of capital a year from foreign investors.

To reach that end, the government has pledged to issue licences in the shortest possible time, reduce the application costs to the lowest rates, and help clear the ground as fast as possible, the planning and investment minister said.

He added that his ministry has been working hard in reviewing the whole application procedure in order to close up unnecessary 'doors,' although the current procedure has already been viewed as very convenient by many project owners who have received their licences in the same day they applied. It takes major projects capitalised at US $70-80 million each only a few days to have their licences issued.

Mr Gia emphasised the need to speed up administrative reforms to help save foreign investors' time, money and energy. "The interests of foreign investors are also ours," said the minister.

A number of legal tools will be reformed to ease the hard currency circulation and remittance procedures, as well as reduce taxes and investment costs such as electricity and telephone charges, he said.

The government has also planned to continue narrowing the gap between the Foreign Investment Law and domestic investment policies such as allowing joint stock foreign-invested companies and test-running partnership investments, said Mr Gia.

These forms of investments have been applied in the domestic economic sector.

The last but not least measure, according to Mr Gia, is to speed up promotion campaigns. He quoted foreign investors as saying that Vietnam has not yet done well in introducing worldwide its improved investment policies and environment as well as its projects with incentives for foreign investors.

He emphasised personnel training as a must to fulfil the task. He said it was more urgent when the central government began granting more autonomy to the local administrations in issuing foreign investment project licences as it has just been applied to Ho Chi Minh City.

The country is trying to raise its competitiveness amid world forecasts of an estimated 30-40% drop in foreign investments, while the demand for foreign investment in many countries will rise considerably.

In 2001, PI Ministry issued a licence for the Taiwanese Formosa Plastics Group's more than US $245 million project to produce synthetic silk on December 26.

The project has brought the total of foreign investments licensed last year to more than US $3 billion, US $200 million more than planned.

Foreign invested businesses have also shown signs of making more profits. Last year, the sector netted more than US $7 billion in its gross revenue. Its export turnover increased 10% while its tax payment was up by 15%. (VNA)