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Foreign investors trust in Vietnamese Government's capability to cope with COVID-19

VGP – Danish investors are still expressing interest in Viet Nam with their plans for setting up here. Many factors making Viet Nam an attractive destination for FDI remain unchanged including the strategic geographical location, the integration into international trade with multiple bilateral and multilateral trade agreements with countries and regions, the third-biggest market in Southeast Asia, and a young and well-educated workforce.

September 27, 2021 9:10 AM GMT+7

Danish Ambassador to Viet Nam Kim Højlund Christensen - Photo: VGP/Kim Loan

Danish Ambassador to Viet Nam Kim Højlund Christensen made the point during an interview with the Viet Nam Government Web Portal (VGP).

According to the World Bank (WB)’s September 2021 Viet Nam Macro Monitoring which was released on September 15, the WB stated that Foreign Direct Investment (FDI) inflow suggests continued confidence in Viet Nam’s economy. Viet Nam attracted US$ 2.4 billion of FDI commitment in August 2021, a 65 percent increase compared to the previous month. What is your point of view on this statement?

Ambassador Kim Højlund Christensen: In my opinion, we should always be cautious, of course, with monthly numbers like the one for August 2021, since they are based on decisions made months or even a couple of years ago. However, I am still happy to hear that the FDI figures for Viet Nam are still positive despite of COVID-19, which indicates that Viet Nam is still an attractive place to invest. I have also learnt that out of the total registered capital, the manufacturing sector is still accounting for the largest percentage with about 47%.

Apart from the challenges caused by COVID-19, which many other countries have also experienced, I believe many of the factors making Viet Nam an attractive destination for FDI remain unchanged such as: the strategic geographical location, the integration into international trade with multiple bilateral and multilateral trade agreements with countries and regions, the third-biggest market in Southeast Asia, and a young and well-educated workforce etc. In my opinion, the figures also showed the World Bank’s and foreign investors trust in the Vietnamese government’s capability to cope with COVID-19 in the first 8 months of 2021. It is key that focus is still on fighting COVID-19 while at the same time minimizing the negative consequences of lock downs and disruption of supply chains. The remaining part of the year will be crucial for Viet Nam to meet this year’s economic targets.

On a positive note, I would like to share that Danish investors are still expressing interest in VieN am with their plans for setting up here. The Danish Embassy in Viet Nam is working closely with these investors to assist.

How about the business and production activities of Danish firms in Viet Nam over the recent months, especially when the fourth wave of coronavirus resurgence began?

Ambassador Kim Højlund Christensen: Like many others, Danish companies have been facing numerous challenges during the last few months due to COVID-19 and the restrictions, such as getting employees vaccinated, delays of many projects, difficulties in getting experts into Viet Nam from abroad and moving staff between provinces amid the travel restrictions. However, the ones being affected most are companies having production facilities, especially in the South because this part of Viet Nam was hit harder by the outbreak this time. Restrictions and measures such as “3 at site” or “1 route 2 destinations” have resulted in temporary closure or significant downsizing in operation. All of this has placed a heavy burden on the companies in terms of costs and delivering orders – and it even impacted the global supply chain for some companies in niche areas. 

Needless to say, Danish companies respect and comply with all regulations. And they have been taking very good care of the local employees despite all challenges. The companies carried out necessary measures to protect all the workers and staff, providing safe and comfortable working conditions for the ones staying in the factories, and do whatever they could to ensure their wellbeing.

The Embassy has been staying in close dialogue with Danish companies and assisted where possible. In some cases, we had to raise the issues to the local authorities and got good support which we have highly appreciated.

Would you please propose main factors and recommendations for Viet Nam to maintain manufacturing and production activities amidst the outbreaks of COVID-19 as well as measures to attract more FDI capital flows?

Ambassador Kim Højlund Christensen: In my opinion, for the moment, timely and efficient vaccination roll-out is the key to maintaining production activities and the recovery of the economy. Another important thing that needs to be carefully considered is social distancing and lockdowns. In many other countries that were hit earlier than Viet Nam by COVID-19, some valuable lessons were learned. Among these, the cost of hard lockdowns can be very high.

In addition, aligned policy and regulations regarding COVID-19 across all levels of government, from the central to local authorities, are crucial. It is important that the policy is clear for businesses to apply and follow without confusion.

An option I would like to suggest is to implement a system where businesses having a certain percentage of their staff fully vaccinated can go back to operation instead of waiting until the herd community is achieved countrywide. This could particularly play a positive role for factories and industrial parks which play a key part in the country’s export and supply chain.

Speaking about measures to attract more FDI into Viet Nam in general, from my standpoint, promoting a favourable business environment is very important. Viet Nam should also continue improving the quality of institutions and governance. Regulatory framework should be up to date, and clear implementation guiding is introduced in a timely manner.

In this era of technology, governments around the world are digitalizing administrative procedures to save time and cost for businesses. And we all know that investment in transportation and logistics infrastructure is one of the key factors for foreign investors when selecting investment location.

Another thing the government can do is to further upgrade the education system to ensure the supply of workers and labour force with adequate skills for foreign investors, at attractive costs. And last but not least, Viet Nam can promote green transition in the economy to ensure that the growth is sustainable and attract high quality and green foreign investment.

Would you please share experiences and solutions Denmark launched to maintain manufacturing and production activities when the pandemic hit hard the country last year?

Ambassador Kim Højlund Christensen: Like Viet Nam, COVID-19 resulted in lockdowns and significantly lower activity in Denmark. Denmark was harder hit in the beginning of the epidemic than Viet Nam, but a regime of massive testing, vaccination and use of a so called digital COVID-19 passport (that showed if you had recently tested negative, had overcome the disease and gained immunity or was fully vaccinated) were helpful.

This made it possible to keep production sites open whereas white collar workers worked from home. Special focus was on getting vaccines early and now with about 75% of the population have been vaccinated fully, we have been able to reopen society, so in Denmark there are no longer restrictions on gatherings, use of masks, working from home, school closures or closure of shops and services./.

By Huong Giang