Vietnam told to improve business climate

Vietnam told to improve business climate

Agence France-Presse, Hanoi

Experts and business leaders urged Vietnam on Monday to improve
the investment climate and accept private businesses in major
infrastructure projects in the country.

At a meeting in Hanoi ahead of an informal meeting of donors
to Vietnam, foreign investors asked the government to simplify
the legal framework regulating investment in infrastructure.

"The general concern is whether infrastructure development can
keep the pace required to meet the ever increasing demands for
improved and expanded infrastructure", said Jean-Michel
Caldagues, member of the board of the European Union Chamber of
commerce in Hanoi.

"Already in some areas such development is lagging, posing a
considerable threat," he added.

His comments were echoed by American Chamber of Commerce
governor Tony Foster, who agreed the issue was among those that
could explain the limited U.S. investment in the country.

"The American companies would like to see private
participation in infrastructure projects," Foster told AFP after
the Vietnam Business Forum.

"It is just not sustainable if the government tries to do it
all by itself."

Last month, damage to an underwater cable near Hong Kong
caused havoc for more than 300,000 Internet subscribers in
Vietnam. Traffic was partially restored after few days but the
incident was quoted as an example of the shortcomings in the
country.

Legal infrastructure and predictability were also on the
agenda of the meeting after several recent decisions rang alarm
bells among investors.

Several experts especially criticized a recent decree
limitating the employment of foreign nationals in foreign
invested companies in a bid to stimulate local employment.

The forum, which was organized by the World Bank's private
sector arm, the International Finance Corp. precedes the June 16
to June 17 mid-year review of donor countries and organizations
to Vietnam.

The donors, who last December pledged US$2.84 billion in
assistance to Vietnam for 2004, are expected to urge Hanoi to
accelerate the implementation of its reform program and pick up
the pace of disbursement.

Donors will meet in the capital of Nghe An province, one of
the poorest of the country, which was badly hit by the outbreak
of bird flu earlier this year.