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COVER STORY

% What are the challenges in Vietnam’s
business environment for foreign
investors?
Foreign investors think there is still
too much red tape and bureaucracy. The
cost of capital is high, as global interest
rates remain high. Vietnam has to compete
as a destination for FDI from many other
parts of the world, like Mexico in the
North American market and parts of east-
ern Europe in main EU markets. In the
CATALYSTS past, it has done well by establishing
bilateral and multilateral free trade agree-
ments, but all countries need to make
FOR GROWTH the choice to relocate to their particular
country as easy and as painless as possible
to continue to succeed.

Mr. Craig Martin, Chairman of Dynam Capital, shares % What should the Vietnamese Gov-
his thoughts on Vietnam’s economy and investment ernment do to attract more foreign
PHOTO: VIET TUAN Vietnam should make its rules and
environment with VET. investment?

regulations easy to understand. The coun-
try would benefit by opening up more
% What do you think about Vietnam’s investors continued to deploy funds to sectors to foreign investors, and also to
economic growth in 2023? renewable energy like solar and wind and continue to energize the growth of domestic
2023 was a challenging year globally, also to lower-carbon energy projects, capital markets, providing clearer guide-
and Vietnam experienced the conse- including LNG. lines to bond market participants and
quences of being a big trading nation: helping to level the playing field for foreign
weaker exports in the first half of the % What sectors do you think will be investors in the stock market.
year resulting in low productivity in fac- magnets for FDI in Vietnam this year?
tories, and that impacted livelihoods and I think there will be further investments % Vietnam has set an economic growth
consumption in the domestic economy. in renewable energy, despite falling rev- target of 6-6.5 per cent in 2024. Do you
Despite the challenges, the country man- enues from lower pricing and in some think this is feasible?
aged to post an overall strong trade surplus cases rising costs. However, I think invest- Forecasting GDP growth can always
and a record level of disbursed FDI. ments in technology will continue to grow. be challenging. GDP growth in Vietnam
On the technology front, there could be a has averaged between 6 and 6.5 per cent
% Foreign businesses and investment renewed push for the development of AI, per annum over the past 30 years. 2023
funds continue to consider Vietnam a which will be largely software driven, and was a difficult year, with the ongoing mil-
reliable destination, and FDI commit- also for developing part of the ecosystem itary conflict in Ukraine, the escalation of
ments and disbursement remained for semiconductor assembly and testing, risk in the Middle East, and uncertainties
robust in 2023. Why do you think FDI which is hardware driven. over global inflation and interest rate tra-
to Vietnam remained robust last year? We may be seeing the start of a replace- jectories. We must also bear in mind the
Previous commitments by multina- ment cycle globally for IT goods that were impact of El Nino and other weather and
tionals to shift some of their global man- in demand during the pandemic, such as climate effects. The Asian Development
ufacturing from China, in an attempt to headphones, cameras, tablets, smart- Bank (ADB) has forecast 6 per cent GDP
de-risk their supply chains, led to a con- phones, and laptops, and that could help growth in Vietnam in 2024, which may
tinued flow of FDI into Vietnam. Also, improve productivity levels and also pro- be achievable after the weaker conditions
with the transition to a greener economy, vide a catalyst for expansion of factories. faced in 2023. %

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