The Hanoitimes - There is no doubt that the business environment in Hanoi has become more open, attractive, and business friendly over the last few years, according to EuroCham Chairman Nicolas Audier.
EuroCham Chairman Nicolas Audier talks to Hanoitimes about Hanoi’s efforts to make its investment climate more attractive to foreign investors and put forward recommendations to make it even more appealing.
How do you assess Hanoi’s efforts to better its business environment over the past years? With which are you impressed the most?
There is no doubt that the business environment in Hanoi has become more open, attractive, and business friendly over the last few years. The fact that many of our one thousand members – from SMEs to large multinational companies – chose the city as the base for their operations in Vietnam is testament to Hanoi’s growing competitiveness.
In particular, local authorities have become much more open to dialogue and communication with the international business community. City leaders and departments are very willing to listen to the concerns of foreign enterprises and investors, and work collaboratively with them to find mutually beneficial solutions.
For the first time since the launch of the Provincial Competitiveness Index (PCI) report in 2005, Hanoi entered Vietnam's top 10 business-friendly localities this year. This is one of the most outstanding achievements of Hanoi, and one which is testament to the efforts of the authorities to enhance the city’s business environment.
EuroCham Chairman Nicolas Audier. Photo: EuroCham
Above all, the significant increase in the number of foreign direct investment (FDI) projects in Hanoi have particularly impressed me. Since Vietnam joined the World Trade Organization, Hanoi has been one of the regions driving the attraction of foreign investment in Northern Vietnam.
According to Hanoi People's Committee, in the first six months of this year, the city has authorized 195 foreign invested-projects with a total registered capital of over US$583 million, a rise of 30% compared with last year.
In your opinion, what should the Hanoi authorities do to attract more foreign investment, including those from Europe?
The EU-Vietnam Free Trade Agreement (EVFTA) was signed in Hanoi in June. This historic free trade agreement will open up new waves of foreign investment from Europe, as enterprises look to take advantage of reduced tariffs and increased access to Vietnam’s fast-growing market.
Together with Ho Chi Minh City, Hanoi - as Vietnam’s capital - will attract much of this new investment. However, in order to unlock the full benefits of the EVFTA, authorities could help local businesses better understand the agreement and its provisions so they are ready to capitalize on these new opportunities from the moment it enters into force.
One other positive change that city authorities could make would be to continue aligning local judicial processes with international standards, to give European investors greater confidence to grow their presence in Vietnam even further in the future.
More generally, FDI has had a huge impact on Vietnam’s economic development. Therefore, Hanoi should continue to seek positive solutions to create a more competitive investment environment and attract more FDI in the future.
Firstly, the city should focus on human resource development to ensure that Hanoi has the brightest, best, and most competitive employees. Secondly, more focus should be put on administrative procedure reform to enhance the trade and investment environment. Thirdly, Hanoi should focus on improving the infrastructure of the city with more PPP projects.
EuroCham would like to see the issuance of the legal framework for PPP, expecting that it would expand the fields where private sectors in general and European businesses in particular could play an important role, especially in key areas such as innovation, infrastructure, training and education.
Infrastructure and human capital are, in fact, key concerns for many European companies when investing in Vietnam. Therefore, enhancing the partnership between public and private sectors in such areas will boost the social and economic development of Vietnam.
Thank you very much!