Vietnam encourages more foreign investment: DPM

UPDATED: 08:16, June 25, 2007

Vietnam encourages more foreign investors to come to the country which is changing from a command economy to a market economy, First Deputy Prime Minister Nguyen Sinh Hung on Sunday, who is attending the 16th World Economic Forum on East Asia, said Sunday.

Speaking at a lunch welcoming participants of the meeting, which opened here Sunday, Hung noted that the transformation of the Vietnamese economy had triggered explosive growth of new business formation.

And tens of thousands of new businesses are being opened each year in Vietnam fueling demand for ongoing and sustained investment flows and providing opportunities for foreign players to partner with local enterprises, he added.

According to Hung, foreign direct investment into Vietnam could increase by up to 20 billion U.S. dollars this year, doubling the inflow recorded last year.

Additional funding to support an economic growth target set at 8-10 percent a year through to 2015 would come from regular government bond issues, while further private sector funding would come from a wave of prospective offshore listings of Vietnam companies.

"Last year 750 million U.S. dollars in bonds were issued into international capital markets, and this year we will issue about 1 billion U.S. dollars," the first deputy prime minister told participants.

He said the education system is one of the country's biggest challenges in a bid to sustain economic growth targets, encouraging foreign investors to help upgrade skills in the country's workforce.

"As you all know we have a program of upgrading our education system. We invited others to help us to train the labor force at all levels, from laborers to higher skills that are needed in all levels of business," he said.

In addition, having endured and survived a war, he said, Vietnam understands the importance of peace and stability as a basic requirement of economic growth and prosperity. The upgrading of the transport and logistics networks is also a priority, he added.

Peppered with questions from business elite about how the government will attract foreign investment, Hung said policy would be directed at lowering the general level of taxation rather than providing special incentives.

"Our intention is to modernize our tax system and create a better environment for investors," he said, adding that the government would reduce both corporate and personal income tax rates.

Under the theme of "The Leadership Imperative for an Asian Century", the World Economic Forum hosts the two-day meeting on East Asia in order to invite frank exchange of views on topics including Asian leadership, risk management, sustainable growth and the challenge of competitiveness for economies.

Co-sponsored by the Singapore Economic Development Board, the meeting has attracted more than 300 political and business leaders from 26 countries, including Philippine President Gloria Macapagal Arroyo, Thailand's Minister of Finance Chalongphob Sussangkarn.

Source: Xinhua

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