Celebrating the Year of the Goat, Minister of Planning and Investment Bui Quang Vinh shared his thoughts on the momentous year ahead as Vietnam readies for AEC and global economic integration.

Many experts have forecast that both Vietnam and world economies will continue to face difficulties in 2015. What are your thoughts about the prospects for the upcoming year?

We certainly will have more on our agenda for 2015. In particular, the AEC will formally come into effect by the end of the year. We will also be finalizing negotiations for a large number of free trade agreements (FTAs), most notably of which is the Trans Pacific Partnership (TPP).

I have a great deal of concern about the readiness and the state of health of Vietnamese businesses for integration. In my opinion, both state-owned and private enterprises should be stronger and better prepared to meet the challenges that lie ahead.

FIEs comprised exactly 68% of the country’s total exports.

Each domestic business needs the support of a foreign company to support it in understanding, installing and utilizing the latest technological advances. Vietnamese enterprises haven’t been capable of successfully modernizing on their own without foreign assistance.

Technological transfer from foreign to Vietnamese enterprises is one of the greatest advantages of foreign direct investment (FDI).  In particular advanced technology increases labour productivity, which in turn increases workers wages.

Increased wages in turn directly translate to a better standard of living and savings for workers and— savings benefit the national economy and positively impact economic sustainability.

As another example of the benefits, take the case of Samsung.  Consumers all around the globe recognise the brand name Samsung and are aware that their phones are made in Korea.

However, now people all over the world will get a chance to associate Vietnam and the high quality ‘Made in Vietnam’ brand with Samsung phones.  So FIEs directly serve to elevate Vietnam’s image in the eyes of the consumers of the world.

In the long run, Vietnamese businesses will mature and be able to hold their own in the face of stiff global competition because failing to do is not an option. If we don’t rise to the challenge then we would become a dependent economy.

That is just not the Vietnamese way of doing things.  Failure is not an option.

So this is one of your concerns?

The upcoming year is a transitional period to a new and open economy.  It’s an exciting period that we will all look back fondly on some day and be thankful for.  Sure there are challenges, but we will face them head on and tackle them one by one.

Take state-owned enterprises for example.  We haven’t so far been able to attract sufficient foreign investment.  However, the problem will be resolved in 2015 and we will move forward.

During this period, we have to accept the reality the country, at least in the short term, does not have the wherewithal to make the transition to global integration without the assistance of FIEs and most importantly their investment and technology.

In long term, that will all change.

This year, Vietnam should give more priority to devising and giving effect to policies to resolve difficulties, especially for small and medium sized enterprises and assisting them attain growth and move up the supply value chain.

Last year, the amended Enterprise Law and Investment Law were approved by the National Assembly and they will come into effect in July 2015. What are your expectations for the new laws?

After laws come into effective on July 1, 2015, we expect that they will create better a business environment more conducive to the needs of the business community.

Together with other policies on bank loans and solving bad debts, we are confident that Vietnamese enterprises will be able to more readily attract the financial resources necessary to invest in higher technology independently of FIEs.

VOV