Slow progress makes VN less attractive: WB chief Huong Giang-Cam Van Kinh   The World Bank’s country director Victoria Kwakwa (right) speaks to the media after a workshop in Ho Chi Minh City in 2011. Photo: Thoai Tran   Vietnam can't stand still or slow down if it wants to be in the game given the very strong competitiveness of the global business environment. It has to constantly push ahead, said Victoria Kwakwa, the World Bank (WB) country director in Vietnam in an exclusive interview with Tuoi Tre. You have been working in Vietnam for more than two years. In your view, are there any specific areas that the country has made strong progress in improving the investment environment? I am not an investor, so I don’t take the experience about the local investment environment in the same way as many investors do as stakeholders, since the details will change from day to day on the investment front . So I can’t provide a lot of details about this. I can talk more broadly based on the data that we have from WB reports, including Doing Business and other competitiveness reviews. If you look at the latest Doing Business report that the WB and International Finance Corp (IFC) have completed, there was one year that Vietnam made some progress and improved in the ranking, but in general, Vietnam’s ranking has not gone in the right direction. Taking into account the 2012 World Economic Forum’s rankings as well, Vietnam has consistently lost ground vis-a-vis other countries over the last three years. By observing these indicators, one would be inclined to think a couple of things: not that no progress has been made in improving the investment environment, but the rate at which the progress is being made is overshadowed by the rate in other countries.  Because these rankings are all relative, you can't stand still or slow down if you want to be in the game given the very strong competitiveness of the global business environment. You have to constantly do things that push you ahead. Coming back to your question, my sense is that there are some areas where Vietnam has made some improvement. In regards to tax issues, with Vietnam’s ranking in the Doing Business 2013 report, there has been some improvement in paying taxes, but the system is still cumbersome. So progress been made, but I think there are also some areas where a lot of work remains to be done so that Vietnam can keep up with other countries regionally and globally. This is in the aggregate, as opposed to concrete details that an investor would be able to talk about. You've attended many sessions of Vietnam Business Forums (VBF). What outstanding complaints should the Vietnamese government pay more attention to? As you know, VBF has many working groups in different fields including banking, education, capital market, manufacturing, mining, tourism, and so on. I think that, to speak very candidly, at the last VBF meeting, there was a very pervasive sense that little progress has been made. There was a lot of disappointment and concern that not much had been achieved in the dialogue with the government in each of these areas. I don’t hear any stories or reports that are optimistic about significant progress. VBFs have many working groups that maintain dialogues with relevant government institutions in each area, like the State Bank of Vietnam regarding the capital market and other ministries regarding other fields. These discussions are a chance for participants to raise issues, and they expect relevant state agencies to take necessary measures so that future meetings can report on the progress made and talk about the remaining issues. But at the last few forums, including one in December, there has been little in the way of progress. So again, back to the business environment, we can point to areas in which some progress is being made, but there is a huge unfinished agenda to make the environment friendlier, not just for attracting investment but for actual implementation.  Attracting investment is not so difficult, but the main problem is the implementation process. There are still quite a lot of challenges thanks to government procedures and bureaucracy which take a lot of time to overcome. As a result, simplification, predictability, ease of interpretation, and some outstanding tax issues still need to be addressed. Considering the business environment ranking, do you still believe Vietnam is a good destination for investment in a broad sense? If you look at the last couple of World Economic Forum (WEF) reports that included big downgrades for Vietnam a big part of the problem is macro instability. But Vietnam changed this just a year later. So, a lot of these things are within the capacity of the government to address, and some can be done in a relatively short time period. The problem is the government’s commitments and how to realize them. I think Vietnam should be an attractive destination with its resources, talented and youthful population, and a favorable geographic location in a dynamic region. So, it has a lot to offer. The government has the power to make some changes to make it easier for investors. I wouldn’t shy away from Vietnam, but the government must take continued, strong action to make a commitment to implement changes. If you look at the numbers of commitments compared to actual investment, there is a big gap. This has happened with us as a development partner of Vietnam. We have big commitments, but the disbursement is quite weak. What will it take for Vietnam to regain the confidence of the international community? I don’t think Vietnam has yet lost the confidence of the international business community. Its standing in several rankings has eroded but that doesn’t mean there is no interest from investors, both foreign and domestic. What we are finding is that the types of investment are becoming more concentrated. Only certain parts of the world find Vietnam less attractive as an investment destination. But I don’t think it’s accurate to say Vietnam has lost investors’ confidence. It has only lost spots on rankings and credibility regarding the ability to do business here. It’s within the government’s reach to reverse that and to put in place appropriate policies and measures that will restore some of the attraction that has been lost. These policies should not just focus on improving the country’s attractiveness, but should also include issues concerning administrative simplification, business registration, investor protection, and macro stability, all of which have been mentioned in the Doing Business reports. The government is making some progress in maintaining macro stability, and that needs to be continued. You also have to make sure there are enough skills and talent in the local market, and the government should invest more in the building of skills for the workforce because investors often complain that they can’t get the skills that they want. It is a long term endeavor, but it is very important to strengthen Vietnam’s vocational skills training and higher education to link them more to industries. TuoitreNews