VietNamNet Bridge – Alain Cany, Chairman of Eurocham, who told the local press six months ago that he was optimistic about Vietnam’s economy, has confirmed his optimism, even as the situation seems to be getting worse.
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| Alain Cany, Chairman of Eurocham |
In an interview with Saigon tiep thi newspaper yesterday, Mr Cany said that Vietnam proves to be an attractive place to seek business opportunities because the country has a young population, and because the government is willing to continue opening the market.
He said that what is happening today is the result of the slides of the global economy. In fact, the global economic recession has had bigger impacts on Vietnam than other economies due to the country’s domestic weaknesses. State owned enterprises prove to lack competitiveness and transparency in operation. Moreover, the high business costs in Vietnam have been worrying investors.
The next period of 3-6 months will be very important for the government to implement important measures to curb inflation and settle enterprises’ difficulties and the problems of the real estate market.
It is estimated that 60-70% of real estate transactions in HCM City have been undertaken for the purpose of speculation. If the problem cannot be settled, monetary problems will occur.
In addition, Vietnam also needs to prevent big economic groups from making massive investments in non-forte business fields, especially banking, securities and real estate. If the investments are made with state owned money it could be very dangerous.
When asked to comment about the reports released by three foreign banks recently on Vietnam’s economy, which said that Vietnam’s economy is now on the threshold of a recession, and that the VND needs to devaluate by 40%, Mr Cany said that the reports were a little ‘negative’, especially the one released by Morgan Stanley.
In fact, the report makers are not in Vietnam. They made the report based on facts and figures, which have been really worrying. However, Mr Cany, as a person, who has spent a lot of years in Vietnam, does not share the same viewpoint.
The government of Vietnam has not given any response to the negative reports. However, according to Mr Cany, the government is right in doing this because it should focus on action.
Foreign investors have committed the record high level of $15.7bil of foreign direct investment in the last five months of the year. The commitments reflect what investors thought six months ago: they believe that Vietnam is a good place for making long-term investments.
The Eurocham Chairman told Saigon Tiep thi’s reporter that he would remain optimistic about Vietnam’s economy until… October. At that time, if the inflation rate is high at 20-25%, and if the government has done nothing to prevent speculation in the real estate market, and to prevent economic groups from making widespread investments, he will have doubts about Vietnam’s economy.
(Source: SGTT)
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