The business community is
doing its best to put a positive spin on the country’s prospects despite a
range of challenging factors in the mix.
Business
representatives attending the annual Vietnam Business Forum (VBF) in Hanoi last
week raised the usual concerns over macroeconomic challenges and administrative
burdens, but also expressed confidence in a brighter outlook in 2012 and
beyond.
“While
the gloomy image of macroeconomic instability, 20 per cent inflation and a weak
currency in Vietnam is temporary, the medium to long-term outlook remains
positive,” said Christopher Twomey, chairman of American Chamber of Commerce in
Vietnam and chief executive officer of ACE Insurance Company in Vietnam.
A
survey on business sentiment conducted by the VBF Secretariat during
September-October this year among 240 firms found that business morale had
fallen to a three-year low in 2011 and much lower than the levels recorded in
2010.
The
survey, with 80 per cent of participants being domestic firms and the remaining
20 per cent having foreign investment, gave an average score of 2.04 on the
ease of doing business in Vietnam for 2011 compared to 2.52 in 2010 and nearly
1.9 in 2008 when the global financial crisis first struck.
Under
its definition, four meant very good, three signified good, two was acceptable
and one poor.
However,
the ratings for the favourableness and ease of doing business in Vietnam for
2012 and 2013 were rated at 2.45 and 2.88, respectively, by the respondents.
This
indicates growing confidence among business community for the next two years
and could be a result of faith in the government’s efforts to restructure the
economy and implement a raft of measures to recover macroeconomic stability.
“Most
respondents believe that sticking to this resolution, painful and difficult as
it may be, is right and necessary to ensure the survival of the economy,” the
survey report said.
The
Vietnamese government would keep on pursuing tightened fiscal and monetary
policy, Minister and Chairman of Government Office Vu Duc Dam affirmed in a
governmental press conference last week.
Dam
said the government would continue to create favourable conditions and remove
barriers for private enterprises to develop next year. He added that he
expected the private sector would be the key driver of economic growth targeted
at 6 per cent.
“We
are restructuring investment by reducing public investment. So if we don’t have
policies to encourage private investment, our economic growth will not reach 6
per cent next year,” said Dam.
Meanwhile,
the government would adopt specific plans to restructure the financial system
and state-owned enterprises next month, according to the Ministry of Planning
and Investment.
Twomey
said if the government’s plans were strictly implemented, the business
environment was bound to improve.
The
VBF Secretariat survey revealed that 69 per cent of enterprises said they would
be expanding their business in the next three years. The key reasons for the
expansion were perceptions of local and regional market growth, better
prospects of the local economy, and market opening and reform following
Vietnam’s increased integration into the world economy.
Ngoc
Linh | vir.com.vn
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