Vietnam Business Forum: Restoring Economy and Developing Supply Chains
Overview of the Vietnam Business Forum 2022 “Restoring the economy and Developing supply chain in the new normal”
By Thanh Huyen Do, Assistant Manager, Business Intelligence, Dezan Shira & Associates Ho Chi Minh City office
On February 21, a high-level session of the annual Vietnam Business Forum 2022 took place with the theme of Restoring the economy & Developing supply chain in the new normal. This was an event organized by the Ministry of Planning and Investment (MPI) in collaboration with the World Bank and the International Finance Corporation (IFC).
The session was held to discuss Vietnam’s economic issues including improving business conditions, role and responsibility in developing sustainable supply chains, and identification of local and foreign businesses in supply chains.
Vietnam Business Forum (VBF) is an ongoing policy dialogue channel between the Vietnamese government and the business community towards a favorable business environment since 1997. The forum typically features one specific theme that is in line with the government’s working agenda within the year.
Vietnam’s Prime Minister Pham Minh Chinh attended the event along with leaders of ministries, branches, representatives of diplomatic missions, embassies, as well as domestic and foreign business associations.
Besides updating the status of issues raised in the previous forum and proposing recommendations in the coming policy development, it is the chance for enterprises and the government to better understand the opportunities and challenges facing the business community in Vietnam.
Positive results in 2021
At the forum, business associations from the US, the EU, Japan, and South Korea appreciated the efforts and positive results of Vietnam’s economy in 2021.
According to the Vietnam Chamber of Commerce and Industry (VCCI), the government has had timely and effective management directions to remove difficulties for the business community. In particular, the government has successfully implemented the vaccine diplomacy strategy with rapid vaccine coverage, making Vietnam achieve one of the highest vaccination rates globally.
As of February 28, 78.6 percent of the population had been double vaccinated, while 40 percent had received booster shots.
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As a result, in 2021, the GDP growth was 2.58 percent, while the total import and export turnover reached a record of US$668.5 billion. In addition, the credit market and exchange rates were stable.
Representing the European Chamber of Commerce in Vietnam (EuroCham), Alain Cany strongly applauded the one-year anniversary of the EU-Vietnam Free Trade Agreement (EVFTA) implementation. 2021 saw a 14.8 percent increase in trade between the EU and Vietnam, reaching about US$63.6 billion. With restrictions easing and countries reopening, Vietnam has the chance to attract a new wave of FDI from EU investors looking for a flourishing, safe, and competitive investment destination.
The American Chamber of Commerce in Vietnam (AmCham) also confirmed their optimism about prospects for reopening, recovery, and the rebound of Vietnam’s economy. With more than 650 corporate and 2500 individual business representatives throughout Vietnam, American businesses account for billions of dollars in foreign investment, tens of thousands of direct employees, hundreds of thousands of indirect employees, and a significant share of Vietnam’s exports and tax revenues.
Measures for sustainable economic recovery
During the high-level session, representatives from organizations and business associations discussed many proposals to recover the economy against the negative impacts of the pandemic that will accelerate the country’s economic recovery & develop sustainable supply chains in the new normal.
VCCI presented 10 recommendations including facilitating the information access to policies and regulations to support businesses, effectively assisting enterprises in accessing financial sources and simplifying immigration and travel procedures for workers and experts, and accelerating the IT application in administrative procedures, among others.
EuroCham recommended strengthening cooperation between the competent authorities in Europe and Vietnam to remove trade bottlenecks and existing barriers, and at the same time to create a favorable environment for the exchange of services and goods between contracting parties.
AmCham suggested reforms to unlock the full potential of the digital economy, accelerate e-government for efficient and effective services to residents, transition to a cleaner energy future, invest in infrastructure to drive sustainable growth, develop a globally competitive workforce, and reform capital markets to drive investment.
PM Chinh confirmed the government’s support on all economic sectors, encouraging private and foreign investment, investment in high technology, supporting industries, smart agriculture, environmental protection, renewable energy, infrastructure construction, and projects serving social security.
The PM also requested relevant ministries and branches to consider and integrate the delegates’ reasonable proposals and recommendations into their programs and action plans during the implementation of Resolution No. 11 on socio-economic development and recovery program and Resolution No. 43 of the National Assembly on fiscal and monetary policies to support the program.
Key issues by the World Bank
Representing the World Bank (WB) in Vietnam, Carolyn Turk, the Country Director, expected that sector growth rates in industrialized countries will slow down, for the next year or two. Interest rates are expected to go up and inflation may be a feature of many economies, which will be a challenging global context for Vietnam to plan an extra recovery.
Climate change is a significant problem for Vietnam; over 3 percent of GDP was estimated to be lost to severe weather events. It further forecast that by 2050, it might be as much as 15 or 20 percent of GDP that Vietnam will spend on climate change-related disasters.
Turk emphasized that the WB is working with the Vietnam government to make sure the kind of adaptation measures that are needed are put in place to help Vietnam maximize its resilience.