The COVID-19 pandemic has strongly affected investors, including those from Korea. Vietnam Business Forum’s reporter has an interview with Mr. Kim Han Yong, Chairman of the Korea Chamber of Commerce in Vietnam (Korcham), to learn about difficulties faced by businesses and economic recovery prospects in Vietnam. Ha Linh reports.

How are Korean companies in Vietnam affected by the COVID-19 pandemic?

COVID-19 has caused an all-embracing impact on industrial manufacturing, especially tenants in industrial zones. Recently, we are quite concerned about the guidance on COVID-19 tests for all employees of tenants in industrial zones across Vietnam, including Korean companies, in the fight against COVID-19 contagion.

Industrial parks have had to be closed or locked down to prevent COVID-19 infections, which has caused supply disruptions to their tenants.

As new COVID-19 cases increase, businesses must meet certain conditions to continue their business operations (for example, double PCR tests before being resumed, weekly testing after being resumed, workers residing in separate dormitories, operating private shuttle buses, signing separate contracts with medical facilities). Companies incur heavy costs of PCR testing and operating medical facilities.

The special entry has been suspended since the end of April, making it impossible for key personnel (managers, technicians and experts) to enter Vietnam. As a result, business and production disruptions are inevitable. Early vaccinations will make it easier for Korean companies to work effectively in Vietnam. Previously, we asked the Government Office of Vietnam to administer vaccination procedures for Korean companies in Vietnam as soon as possible. We also suggested that the Government select and purchase highly effective vaccines and construct an early vaccination schedule for each locality. If employees of Korean companies are vaccinated soon, they will be able to restore operations in the fastest manner, and I think this will help develop Vietnamese industry. Once again, I would like to ask the Vietnamese government to weigh up difficulties faced by Korean companies to minimize business and life disruptions during this difficult time of COVID-19 pandemic. We hope that these difficulties will be resolved as soon as possible.

Vietnam has been making great efforts to contain the COVID-19 pandemic. What do you think about Vietnam’s economic recovery prospects?

First of all, we would like to thank the Government of Vietnam as well as local authorities for being very drastic in the fight against the pandemic, with quick tracking measures combined with standard pandemic prevention instructions to help people and the business community stay safe.

We believe that Vietnam has been, and will be, doing a great job in containing the pandemic thanks to the consensus from the Government to the people of Vietnam. On behalf of the Korean business community in Vietnam, we pledge to work closely with the Vietnamese government and people in this fight.

Given the complicated development of the pandemic, the successful organization of the 13th National Party Congress and the congressional election on May 23, 2021 have helped Vietnam gain high credibility in the international arena. This will be leverage for Vietnam to become the next destination after the COVID-19 pandemic crisis.

With a solid foundation inherited from the previous administration, we believe that the new government will offer more preferential policies to woo FDI flows, helping Vietnam achieve positive growth. In particular, if Vietnam accelerates imports and vaccinations, it will soon recover the domestic economy, and revive and grow export and external economic ties, driven by exports.

What factors do you think Vietnam needs to focus on to attract quality FDI flows from other countries, including Korea?

On December 18, 2020, the Prime Minister issued Official Letter 1804/TTg-CN on selection of border gate economic zones for State-funded development investment in 2021-2025. Particularly, eight key border gate economic zones are selected for State-funded focused development investment in 2021 - 2025.

Currently, Vietnam is aiming to selectively attract investment for key sectors such as high technology and smart cities. To do that, as a foreign investor doing long-term business in Vietnam, I think that Vietnam needs to overcome the three following factors to draw more quality investors, including Korean investors.

The first is to improve the quality of well-trained human resources.

Vietnam still lacks well-trained high-quality human resources, so the Government needs to pay more attention to improve this.

Second, it is necessary to effectively apply external factors and opportunities.

It is necessary to actively and creatively catch FDI flows redirected from China to Vietnam due to the COVID-19 pandemic, the U.S.-China trade war, and the Korean Government's New Southern Policy (NSP) to attract foreign investors for priority areas, and upgrade domestic enterprises themselves in value chains.

Third, it is necessary to improve the quality of made-in-Vietnam products.

To increase business connectivity to generate positive impacts for foreign and domestic enterprises, in addition to effective and appropriate support from the government, domestic enterprises need to improve the quality of human resources, governance and business standards to forge cooperation and attract capital from FDI firms.

Especially, they need to improve the quality of domestic products. Then, they will be able to join supply chains and cooperate with FDI firms.

Here, the government plays a very important role in creating business connectivity, limiting market defects, and improving the competitiveness of domestic enterprises.

I think that if Vietnam takes advantage of its unlimited potential and internal resources in combination with various factors learned from the new normalcy of economic development, and if it continues to improve its policies/institutions regarding investment attraction, Korea will continue to choose Vietnam as the most attractive investment destination.

Currently, many Korean businesses are putting their trust in the Vietnamese government and making investments in the country. However, there is a shortcoming: Inconsistency in regulatory documents. Only when there is consistency in investment attraction policies to strengthen the confidence of Korean businesses that have been investing in Vietnam, will enterprises which are investing continue to expand their business investment, and will new investors come to invest in Vietnam.

We will make every effort to promote cooperation development ties between the two countries as well as expand economic exchanges based on the trust that Korean businesses have accumulated over the years.