The Government led by Prime Minister Nguyen Xuan Phuc has been actively engaged in the modernization process, in line with the progressive opening started 35 years ago with the Doi moi policy. 

Ambassador Giorgio Aliberti, Head of the EU Delegation to Viet Nam

Ambassador Giorgio Aliberti, Head of the EU Delegation to Viet Nam made the above statement in an interview with the Viet Nam Government Portal recently.

From a European perspective, it is important to see a strong continuity in policies going in the right direction though it is a long process, which needs time and strong determination. 

As an external actor, the EU delegation tries to share experience and suggests appropriate measures aimed at achieving a level playing field not only for foreign companies, but also for Vietnamese SMEs, which represent by far the greatest majority of this economy. 

In this context, the ratification of the EVFTA is an important milestone since it is full of reform ideas relevant for a smooth business environment, said Aliberti.

During this process, the PM and the National Assembly have tackled a very important reform of Vietnamese Labor Code. Let’s not forget that labor is one of the key productive inputs. This revision has granted more protection and even more rights to workers in Viet Nam. After the entry into force, the Government of Viet Nam has continued the implementation of core international labor Conventions that will be crucial for the continuous strive of Viet Nam to become a developed country in a not too distant future. These are important achievements for upgrading the quality of investment conditions – which in turn will also help to attract higher quality FDI, including from the European Union investors.

In a similar vein, the outgoing government has started a number of regulatory reforms that will increase the transparency of rules and administration. The EVFTA contains many examples of how the business environment can be made more business and investment friendly. Trade facilitation is the key theme.  One thing should be clear: only if the trade environment is improving, will EU high-quality investors be ready to come to Viet Nam. 

As both sides are now entering in a new phase of the EVFTA implementation: it will be focused more and more on cooperation in regulatory matters and bringing the Vietnamese regulatory system more in line with international standards and best practices. 

The Government led by PM Nguyen Xuan Phuc has opened a broad and promising new highway. It has already started to take away the toll houses by reducing the tariffs on both sides. What should be done now is to continue cleaning the road from leftovers of the construction work, straightening out some unnecessary turns, and putting up clear signalization for a speedy and smooth flow of traffic.

Regarding the Government’s efforts in improving the business climate, Ambassador Aliberti said the investment law revision at the beginning of this year can only be a beginning of several additional revisions. 

It is of course a very complex piece of legislation, but it rather looks like a first move to bring more cohesion into the investment conditions.

There will still be numerous conditions, such as ratios of foreign investors’ capital contributions, forms of investment, scope of investment, capacity of investors and Vietnamese partners in joint projects, according to Aliberti.

There are numerous rules on investment incentives. But investment incentives basically mean renouncing to revenue that the Vietnamese State and society need. 

The revisions does not include the most important, almost cost-free, and so much more powerful tool: full transparency and more predictability on administrative acts. Every administrative act should be published, preferably accessible in English, every administrative act should have a clear and rapid time-frame, every fee should be clearly known in advance. 

All unnecessary and antiquated licenses should be revoked or reduced to the minimum necessary. Some countries have installed “single windows” for FDI: they managed to reduce the time to set up FDI in their countries from several months to sometimes below one week, the ambassador suggested.

Questioned about the initial results of the EU-Viet Nam Free Trade Agreement (EVFTA) that took effect on August 1, 2020, Ambassador Giorgio Aliberti said the trade deal offers lots of tangible and intangible benefits. 

The past six months have witnessed some progress in the bilateral trade. For example, according to the statistics of Viet Nam’s Customs, during August – December 2020, Viet Nam’s exports to the EU increased by 3.9%. Meanwhile the EU’s exports to Viet Nam in the same period grew by 4.1%. 

The EVFTA has prevented that and produced a positive growth rate in the midst of the pandemic, he added./.