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| Special Interactive Lunch with Nguyen Sinh Hung, First Deputy Prime Minister of Vietnam |
| Singapur, 24.06.2007 |
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| Foreign direct investment into Vietnam could increase by up to US$ 20 billion this year, doubling the inflow recorded in 2006, Nguyen Sinh Hung, First Deputy Prime Minister of Vietnam, told participants. Additional funding to support an economic growth target set at 8-10% a year through to 2015 would come from regular government bond issues, while further private sector funding would come from a wave of prospective offshore listings of Vietnam companies, he added.
“Last year US$ 750 million in (government) bonds were issued into international capital markets, and this year we will issue about US$1 billion,” Hung said during a question & answer session following a brief introductory address.
The transformation of the economy had triggered explosive growth of new business formation, he said, and tens of thousands of new businesses are being opened each year in Vietnam fuelling demand for ongoing and sustained investment flows and providing opportunities for foreign players to partner with local enterprises.
“We want to encourage foreign investors to come to Vietnam. We are changing from a command economy to a market economy which means big local groups are in the process of privatization. This will see the continuation not only of direct foreign investment, but also financial investment flows into the corporatization and privatization of companies,” Hung said. “We will also forge connectivity between markets with share issues and some domestic companies may seek international listings for their shares, for instance on the Singapore market.”
Quizzed on the biggest challenges facing the government in its bid to sustain economic growth targets and provide jobs, Hung said the keys to sustaining Vietnam’s economic success story are peace and stability in the region, and the upgrading of skills in the country’s workforce.
“As you all know we have a programme of upgrading our education system. We invite others to help us to train the labour force at all levels, from labourers to higher skills that are needed in all levels of business. We are now a member of the WTO and a big challenge for us at the moment is our education system.” In addition, said Hung, having endured and survived a war, Vietnam understands the importance of peace and stability as a basic requirement of economic growth and prosperity. The upgrading of the transport and logistics networks is also a priority, he said.
Asked if the government would respond to competition for foreign investment in the region from other markets by introducing tax holidays for investors, or creating Special Economic Zones, Hung said policy would be directed at lowering the general level of taxation rather than providing special incentives.
“Our intention is to modernize our tax system and create a better environment for investors,” he said. Sustained economic growth and increasing revenue collections, he added, would allow the government to reduce both corporate and personal tax rates.
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