TheLEADER had a interview with Natasha Ansell – Citibank Vietnam's General Director and Chairperson of American Chamber of Commerce (AmCham) on the sidelines of the Vietnam Business Forum (VBF) 2017.
What are the impacts of Vietnam’s regulatory changes to the businesses?
Natasha Ansell: One of the issues raised by AmCham at the Forum this year is that some of the recent regulatory changes in Vietnamese policy are inadequately in line with international practices, which is a backward step of Vietnam.
For example, the excise tax on sweetened beverage is an uncommon practice and not recommended. We have conducted surveys in 158 different countries, in which only 40 countries, including four in the Asia-Pacific region (with less than 2% of the region's population) enforce this law.
We fully understand that the Government of Vietnam has introduced this regulation to improve Vietnamese’s physical health, and we also want to help raise awareness among Vietnamese people about effective consumption.
However, that the authority just isolates an industry while other food industries have similar components is not a really effective solution, reducing the market’s competitiveness.
Do you have any recommendations for the Government of Vietnam to implement policies effectively?
Natasha Ansell: We believe that Vietnamese government should carefully consider the impact of a policy before enacting and enforcing it.
Authorities need to raise competitiveness for the business environment by offering more effective solutions to promote an industry rather than ‘to prohibit’.
For example, in terms of the draft of excise tax on sweetened drinks, instead of levying taxes to raise prices and reduce the products’ consumption, the Vietnamese government should raise awareness of a healthy lifestyle among local people.
I myself am a marathon runner, I control what I eat or drink without being reminded or 'banned' by anyone.
How do you evaluate Vietnam’s investment environment?
Natasha Ansell: I appreciate the improvement of Vietnam's investment environment and I believe it will continue to grow in the future.
Over the past few years, we have seen many US companies operating in various sectors in the country. These businesses have invested billions of dollars here, contributing to Vietnam's participation into the global supply chain; creating high-quality jobs for Vietnamese workers and opening up a new market for goods and services for the US.
Thus, every single improvement promoting competition and widening the investment environment poses a great impact on the businesses operating here in Vietnam. In particular, the most positive movement, from my perspective, is that the private sector is more and more involving and contributing to the economic growth.
However, it seems that many investors are still hesitant to invest in Vietnam, as the US only ranks 10th among countries having FDI fow in Vietnam. In your opinion, what are the main obstacles for foreign investors?
Natasha Ansell: We realize that the import process into Vietnam is becoming more expensive and complex than expected.
Given Vietnam's trade surplus US$32 billion with the United States last year, it is notably important for Vietnam to be recognized as addressing non-tariff barriers at border gates, as well as 'behind border' barriers which are restricting the operation of the business and inhibiting the flow of imports into Vietnam.
In addition, as we mentioned, recent policy changes, such as the draft Law on Cyber Security, the excise tax on sweetened drinks, Decree 54 guiding the implementation of the Pharmacy Law, Circulars 23 and 32 on guiding the implementation of the Investment Law have led many foreign investors to face new risks and obstacles when making investment.
On a scale from 1 to 5 (low to high), how do you rank Vietnam’s business environment generally?
Natasha Ansell: I have to divide my assessment into two parts.
First of all, I would like to mention the vision and general direction of the Government and the whole economy in the ability to commit and create a favorable environment for promoting production and business.
The ability of determining strengths and priorities that Vietnam economy has had is outstanding compared to other countries. However, when it comes to policy enforcement, there is array of problems including lack of transparency, loose legal framework and overlapping.
Therefore, I would rank Vietnam 5/5 on this possibility, not only on specific figures such as GDP growth or stable exchange rate but also the government's vision through its long-term agenda and its ability to resist shocks which allow Vietnam to move forward.
However, when it comes to policy enforcement, there is array of problems including lack of transparency, loose and overlapping legal framework.
So I would be ranking it, well not number 5 certainly, it is much low down on the scale as concerning this aspect.
That is the main flaw that Vietnam needs to overcome. And Prime Minister Nguyen Xuan Phuc has affirmed that Vietnam will continue to promote competitiveness.
In particular, in the context of the booming of 4.0 revolution, taking advantage of the opportunities stemmed from the revolution will determine which player is more competitive in the global stage.
Thank you very much!