Vietnam will likely receive more investment from supply chain shifts: AmCham

On the occasion of the US-Vietnam Business Summit 2020, Adam Sitkoff, executive director of the American Chamber of Commerce (AmCham) in Hanoi told Hanoitimes about promoting an innovative and sustainable business environment in Vietnam and how to strengthen economic recovery in this time of the global pandemic.

AmCham has repeatedly recommended that the Vietnamese government should promote sustainable and predictable investment policies. What results do you expect from the upcoming US-Vietnam Business Summit?

Adam Sitkoff, executive director of the US Chamber of Commerce (AmCham)

The Covid-19 pandemic has uprooted the ways people work, learn, relax, and consume. There is no business, no sector, and no economy beyond the reach of the devastating influence of this pandemic. Vietnam is on the road to economic recovery but it is likely to be a bumpy ride. I am hopeful that the government’s effective response to the pandemic will further boost Vietnam’s status as an attractive destination for investment.

As the most trade-reliant economy in Southeast Asia, Vietnam’s short-term challenge is its reliance on the rest of the world to drive its domestic growth. While Vietnam’s economy is well-placed to stage a faster and stronger rebound than its regional neighbors, we believe the remainder of 2020 and the early months of 2021 still present many challenges. The main reason is that Vietnam’s major trade partners have all been severely hit by the pandemic - especially the US, which remains the largest export market for Vietnam, even during this pandemic.

We know the prime minister and government have prioritized administrative reform as a method to improve ease of doing business. It is critical that all companies and investors encounter a fair, transparent, predictable, and streamlined regulatory environment that values innovation - not only to attract new investment, but also to maintain and grow the investment that is already here.

As we look at boosting economic recovery after Covid-19, there are many things the government can do right now to improve the business and investment climate and to attract new investment. For example, we need accelerated use of e-government, e-commerce, e-banking, fintech, hyper-scale cloud computing, and the overall reduction of paper and cash for all businesses. Setting good policies that enable the use of mobile wallets and other electronic payment systems can help facilitate more productive e-commerce and reduce opportunities for corruption and fraud. 

The social distancing period clearly demonstrated that e-systems save time and money. Accelerated implementation of these digital economy objectives can permanently reduce administrative costs and time burdens for all businesses - and will attract new investors looking for global standards and ease of doing business.

US companies want to invest in Vietnam's energy sector. Photo: AmCham

How have the US businesses been interested in Vietnam’s energy sector? What issues of the energy sector would be the focus at the Summit?

Vietnam can accelerate economic recovery by continuing infrastructure development and approving and expediting long-awaited investment projects. This is also an opportunity to focus on sustainable projects. Improving waste management, reducing carbon emissions and air quality concerns in Vietnam by accelerating the use of clean energy, clean vehicles, clean agriculture, and reducing the inefficiency and waste of energy, will help build a stronger circular economy and will spur job creation. 

In addition, US companies want to invest in offshore gas development, LNG projects, transmission lines, solar, wind and biomass energy projects. Opportunities in this area can help Vietnam meet its energy development needs while improving the environment here.

How do you see the interests of the Vietnamese government and business in this summit, especially the preparation of the key discussion topics of the event, especially in relation to the potential of world trade?

We know the economic implications of the pandemic are severe for Vietnam and will affect us for quite some time. There are, however, opportunities for Vietnam to capture new business and investment. 

It is no secret that US companies and investors have long complained about other countries’ trade and industrial policies that put US businesses at a competitive disadvantage. Pre-Covid trade tensions highlighted concerns on concentrating production in a single country and the pandemic has made those concerns clearer to everybody. 

Over the past 18 months, Vietnam picked up some of the supply chain shifts and we believe Vietnam will likely see even more such investment as companies come under increasing pressure to diversify their supply chains.

The US business community in Vietnam has poured billions of dollars of investment. Photo: AmCham

What do you think about new opportunities to fuel Vietnam’s economic recovery? What will the US business community in Vietnam expect to contribute to the process?

The US business community here represents 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. We will emphasize at our annual US-Vietnam Business Summit later this week that trusted partners prosper together. 

As we celebrate 25 years of diplomatic relations between our two countries, AmCham hopes that the US and Vietnamese governments will take steps to begin talks on an eventual free trade agreement – multilateral or bilateral. This would be enormously important for Vietnamese and US companies alike. 

AmCham members stand with the Vietnamese people and we remain committed to partnering with Vietnamese authorities to ensure that business is not disrupted any more than necessary during this crisis and that new opportunities for the future are realized.

Thank you for answering my questions!