Private
sector appeal widens
Enterprise
law propels new business
One
of the most promising signs for Vietnam was the implementation of the
Enterprise Law, largely championed by the tireless Pham Chi Lan, vice
president of Vietnam’s Chamber of Commerce and Industry. With the
passage of last year’s Vietnam’s Enterprise Law, the country
witnessed the birth of over 18,000 new business operations, some of them
now employing several thousand people and with a combined investment of
over $1.46 billion. This measurable step resonates well with the West,
and affirms Vietnam’s resolve and confidence to step up its reforms
and jump head first into the turbulent free market waters.
“Vietnam
has now agreed to the concepts of open market access, most favored
nation treatment, and national treatment for American companies, thus
challenging the cozy protection of State-owned enterprises,”
acknowledges veteran American attorney, Sesto E. Vecchi.
Since
its much trumpeted opening, Vietnam’s Stock Exchange has risen 166
percent in value, never mind that there are only 5,000 account holders,
and only a handful of companies trading with hours heavily regulated to
no more than 10 hours a week. The very existence of the exchange sends
another clear signal that Vietnam wants in on the global game even if
under its restrictive terms for now.
Underscoring
the confidence in Vietnam’s reforms, the World Bank’s International
Finance Corporation signed in Hanoi this past December, three Vietnam
investment agreements for projects worth $137 million.
“We
are confident in the reforms taking place and have decided to provide
$12 million for a new Vietnam Enterprise Investment Limited, closed-end
fund with paid in capital of nearly $50 million, which will invest in
Vietnamese-run and owned companies,” said Peter Woicke, executive vice
president of IFC.
Foreign
direct investment continues to play an important role in this new
chapter in U.S.-Vietnam relations. In the 15 years since the advent of
“Doi Moi” or renovation of Vietnam’s economy, over $21 billion has
been disbursed accounting for over 30% of the industrial output and
almost 50% of Vietnam’s exports. The World Bank has estimated that
Vietnam’s exports to the US could increase 30 percent to over $1.6
billion next year.
Even
the fiscally conservative, International Monetary Fund, made a pledge
last November to Vietnam to disburse an additional $52 million under its
$368 million program to place Vietnam on a higher growth path with
faster poverty reduction over a period of three years.
Vietnam recognizes the
economic benefits of its greater openness with the world—faster
growth, cheaper imports, new technologies and the spur of foreign
competition. The biggest prize for the country is the tempting clarion
call from that august body, the World Trade Organization summoning the
political determination of Communist authorities to join the elite
ranks.
© InternationalReports.net / The Washington Times 1994-2002
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