Adam Sitkoff, Executive Director of the American Chamber of Commerce (AmCham) in Hanoi, spoke to The Hanoi Times about the expectations of American investors and businesses in Vietnam from the visit of US President Joe Biden to Vietnam on September 10-11.
| Adam Sitkoff, Executive Director of the AmCham in Hanoi. Photos: AmCham |
The visit of US President Joe Biden to Vietnam is expected to further deepen Vietnam-US relations in the coming years. What do you expect from the official visit?
During US President Joe Biden's visit, we expect announcements and progress on a number of pending business deals and projects. American businesses and investors bring high-quality products and cutting-edge technologies, services, and business practices to Vietnam.
We share an interest in developing a globally competitive workforce, creating quality jobs, and investing in the professional development of our Vietnamese team members. High-quality foreign investors not only help grow Vietnam's economy, but also help grow the entire ecosystem of local businesses and entrepreneurs here, and there are many American companies looking to do more in Vietnam.
On the 10th anniversary of the US-Vietnam Comprehensive Partnership, how would you assess bilateral relations across the board?
Joe Biden is the fifth American president in a row to visit Vietnam. This is something few other countries can claim, and it reinforces the United States’ commitment to a strong, prosperous, resilient, and independent Vietnam.
Today, the US and Vietnam are close friends - something once thought unimaginable - and American companies and investors are now active in almost every sector of Vietnam’s economy, helping to integrate the country into the global supply chain, creating quality jobs, and making the country more productive, safe and cleaner. It is a credit to the people of both nations that we have been able to move beyond the tragedies of our shared past to build such a strong vibrant relationship anchored in mutual respect.
Trade is the cornerstone of the bilateral relationship and great changes have taken place over the past few decades. In 1995, bilateral trade was just $451 million. Last year’s volume surpassed $123 billion and US companies have contributed significantly to the transformation and growth of Vietnam’s economy.
| Prime Minister Pham Minh Chinh and other delegates attend the US-Vietnam Business Summit 2022. |
AmCham now represents more than 650 corporate and 2,500 individual business representatives throughout Vietnam, accounting for billions of dollars in foreign investment, tens of thousands of direct employees, hundreds of thousands of indirect employees, and a significant share of Vietnam’s exports and tax revenues.
The US is one of the top foreign investors in Vietnam, with American companies investing in manufacturing and infrastructure, providing high quality consumer, agricultural, and industrial goods and services. The US is Vietnam’s biggest export market and Vietnam is now one of the top 10 largest trading partner of the US.
Equally important are the cultural ties. The US has the largest population of Vietnamese outside of Vietnam, and Americans of Vietnamese descent play a critical role in Vietnam's development. Their investment, talent, and entrepreneurship have helped fuel Vietnam's impressive economic growth.
Back in 1995, only 60,000 Americans visited Vietnam. That number grew to almost 700,000 visitors per year before the pandemic. Vietnam Airlines nonstop flight to San Francisco is now helping to attract even more visitors. In addition, around 30,000 young Vietnamese people are studying in the US, where they are acquiring much-needed skills and knowledge.
With efforts to promote a comprehensive relationship between the two countries, could you share your vision of a future Vietnam and the relationship between Vietnam and the US?
Vietnam is increasing its attractiveness as a destination for American investment as many companies seek to diversify their global supply chains. I believe the most important factor for a favorable investment climate is a fair, predictable, and streamlined regulatory environment that values innovation - not only to attract new investment, but also to maintain and grow the investment already here. There is no doubt that existing investors expanding operations is the best advertisement to attract new investment.
AmCham places great importance on our engagement with the government. We believe that robust dialogue between the government and the private sector helps lead to optimal public policy outcomes. There are always ways to improve the business climate and we appreciate Vietnam’s efforts to streamline administrative procedures.
However, some regulations continue to introduce new administrative procedures such as licensing, approvals, and heavy reporting requirements. For example, there is still uncertainty and a lack of clarity regarding the requirements to obtain work permits for foreigners.
We encourage the Government to clarify those elements of Vietnamese law that hinder the efficient deployment of foreign investment and that any additional administrative burdens in draft laws and regulations be carefully considered and avoided whenever possible.
During the US President's visit, the leaders of both countries will discuss ways to promote the growth of a technology-based and innovation-driven Vietnamese economy. Could you share your comments?
| Vietnam is increasing its attractiveness as a destination for American investment. |
Crucial to many US manufacturers choosing Vietnam is the ready access to renewable power. Any plans for expansion of current facilities or supply relocations should include green energy solutions.
To achieve its zero-carbon goal by 2050, Vietnam should prioritize energy sources that are both affordable and socially sustainable. This process will require financial and technical support from external sources – and the projects need to be realistic and bankable. Vietnam should eliminate current regulatory uncertainties to unlock substantial international capital waiting on the sidelines.
We know that new power grid projects will attract investment and expand the capacity of Vietnam’s renewable energy sources, providing safe and reliable energy supply for both residential and commercial consumers.
AmCham appreciates the Government’s effort to support Vietnam’s transition to a digital economy. Our members work actively to support this transformation, both with Vietnamese partners and through their own projects. We urge the Government to take a holistic approach and global view in developing a digital regulatory framework. The free flow of data across borders, and access for Vietnamese users to global-standard services and data protection, are vital to that transition.
We encourage continuous improvements in infrastructure development, protection of intellectual property, education reform, health and wellness policies, legal and tax policy certainty, and enhanced transparency in Vietnam.
AmCham looks forward to partnering with the Government to navigate these challenges and improve business conditions that strengthen the private sector, ensure sustainable economic and social development, and promote prosperity here. Progress in these areas will not only help attract more foreign investment but will also support Vietnam’s aspirations to propel itself to the next sphere of economic competitiveness.
Thank you for your time!
