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FDI businesses query the Government   2009-04-18 - VietNamNet/VNE

In the beginning 2009, the economic crisis continued to hurt Vietnamese exports, including those produced by foreign investors. On April 3, the Ministry of Industry and Trade and the State Bank of Vietnam met with Foreign Direct Investment (FDI) businesses in northern Vietnam to talk about how production and exports could be increased.


According to the Import-Export Department of the Ministry of Industry and Trade, in the first two months of 2009, FDI businesses exported USD2.97 billion worth of products, a drop of 8.8% since the same period of 2008. If the situation does not improve, exports for the entire year are expected to slump by 10-15% to total perhaps USD19-20 billion for the year.


At the meeting, business managers spoke of the specific difficulties they are experiencing and they asked pointed questions about infrastructure, tax policies, customs procedures, the government's monetary policy (exchange and interest rates), loans, the procedure for getting Certificates of Origin and other administrative procedures, and human resources. And they had suggestions as to how domestic production and sales to foreign markets could be increased.


Mr. Okazaki Masahiro, the planning and administrative manager of Vietnam Panasonic Communications, said that Panasonic had been making about 2.7 million products every year but, since September 2008, decreased demand required the company to cut production and layoff 30 percent of its Vietnamese employees in the first three months of 2009. Panasonic had set for itself a 2009 export target of three million products but it seems unlike that this will be possible. Mr. Masahiro said that he hopes that infrastructure in Vietnam will improve soon, saying that any improvement would reduce delivery time and production cost.


The representative of Brother Industrial Vietnam brought up Vietnam's tax policy. Brother Industrial has been in Vietnam for three years but it's now having difficulties. It was suggested that the government make changes to its tax policy that would allow big companies to operate profitably. Chiung-Mei Chen, the director of Yang Sin Technology Co., Ltd., said that the current five percent export duty is an undue hardship for companies.


"We exported US$8.6 million worth of products and the 2009 export target that we set at the end of 2008 was USD16 million. However, the Vietnamese government then set a five percent export duty (at the end of 2008) making it unlikely that we'll be able to reach that target," she explained. She suggested that the Vietnamese government follow the example of Japan and Malaysia and eliminate the export duty entirely.


The topic of customs procedures was one with which every business had issues. Every business present stated that customs procedures are not comprehensive, not synchronous and inspections are much too complicated.


Regarding manpower, Le Thanh Thuy, the vice president of the Norfolk Hatexco Joint Venture Company (located in Hanoi and Ha Nam) pointed out that even though the unemployment rate is rising Norfolk Hatexco finds it very difficult to attract new people that have the minimum skills that the company needs.


The representative from the Ministry of Industry and Trade and representatives from other ministries addressed the questions. Nguyen Van Binh, the vice governor of the State Bank of Vietnam, said that foreign exchange rates are fluctuating and the exchange rates in Vietnam will be adjusted according to the market demand.


The representative from the Customs Supervision and Control Department of the General Department of Vietnam Customs said that his department is trying to implement electronic customs service and synchronize procedures and electronic customs service is now being tested in Ho Chi Minh City and Hai Phong Port. He said that he expects that before three years go by it will be possible to do 80 procedures electronically.


The representative from the Ministry of Finance said that businesses can expect that the ministry will be making adjustments in the tax law and at this very minute it is working on a new circular that would reduce corporate income taxes in 2009.


To conclude, Minister of the Ministry of Industry and Trade Vu Huy Hoang suggested that businesses send official complains to each of the offices, departments and ministries that the businesses feel are doing an inadequate job. The minister stressed quite strongly that the government does want to create conditions within which both foreign and domestic businesses can grow.

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