APEC 2017: Remarks by H.E. PM Phuc at Viet Nam Business Summit

                                     Da Nang, November 07, 2017                  

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Viet Nam: Integration, Dynamic Reform and Comprehensive Development

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Madam Victoria Kwakwa, World Bank Vice President for the Asia Pacific Region

Mr. Philipp Rosler, Managing Director of the World Economic Forum

Excellences Ambassadors, heads of diplomatic corps and international organizations in Viet Nam

Vietnamese experts, investors, domestic and foreign business leaders

On behalf of the Government of Viet Nam, I warmly welcome all distinguished delegates and guests to the Viet Nam Business Summit organized on the occasion of the APEC Economic Leaders’ Week.

Along with a series of events during the APEC Economic Leaders’ Week, the Viet Nam Business Summit is held in Da Nang City and the ancient town of Hoi An-a vibrant trading post dating back to the early 17^th century that received merchant fleets from Japan, China, India and Europe, laying foundation for the development of trade exchanges for the past many hundred years. Today, Viet Nam is striving to improve itself to continue to be a potential and “reliable trade partner” of the international business circle and other countries. According to AmCham Singapore’s in September 2017, as many as 56% of surveyed businesses considered Viet Nam their best trade partner.

The World Bank’s report showed that Viet Nam’s economic transformation over the past 30 years is of significant importance. Extensive economic reforms have resulted in high GDP growth, reaching nearly 7%/year on average and people’s income has also increased. The GDP is projected to increase by 6.7% in 2017 and planned to grow 6.5-7% on everage between 2016 and 2020. Viet Nam’s income per capita rose to around US$2,300 (or US$6,800 by PPP).

According to the World Bank’s "2035 Report" released in 2016, around 10% of Viet Nam’s population is middle-class, and the figure is expected to increase to 50% by 2035. It has helped boost the demand of the economy and and create many better jobs. Viet Nam has also gradually partaken in the value chains and production networks in Asia Pacific and the world. Rapidly rising income will lead to the expansion of the middle class and changes in the consumption pattern of the economy, thus opening up opportunities for investors who wish to grasp that trend.

Viet Nam has demonstrated its dynamism through proactive and active international integration and strong support for global free trade. Viet Nam has signed or joined 12 free trade agreements and is engaging in talks on other fours, including those involving 18 partners in Asia Pacific.

Ten years after accessing to the World Trade Organization, Viet Nam’s trade value quadrupled to more than US$400 billion, equipvalent to 170% GDP. We have made endeavor to considerably improve the business and investment environment. At present, there are been more than valid 24,200 foreign direct investment (FDI) from 120 countries and territories with total registered capital of exceeding US$310 billion, equal to 155% GDP. Among them, investment capital inflows from APEC economies stood at nearly US$250 billion, or approximate 80% of Viet Nam’s total foreign direct investment inflows over the past three decades. Many leading economic corporations from APEC economies have chosen Viet Nam to develop their regionl production hubs for global value chain.

According to the world’s prestigious international organizations, businessmen, investors, Viet Nam’s business environment has become increasingly improved. The World Economic Forum’s Global Competitivenss Index (GCI) 2017-2018 showed Viet Nam’s index jumped 20 places over the past five years, to 55/137 while its market size ranked 31/137 economies. According to the World Bank’s Doing Business published on October 31, 2017, Viet Nam’s business environment ranked 68/190 countries, up 14 notches against the previous years (among ASEAN-5). The World Intellectual Property Organization’s report released in May 2017 showed Viet Nam’s global innovation index advanced to 47/127, up 12 places.

Ladies and gentlemen,

Viet Nam has the young population of nearly 95 million, in which nearly 60% aged under 35, fast rising average income and burgeoning middle class. Between 2007 and 2016, final consumption of households accounted for 67.3% of the GDP and rose by 16%/year. Domestic consumption has become an important driver of economic growth in addition to the export sector. Growing income has made Viet Nam ever more attractive to consumer goods, especially well-known foreign trademarks. Apple, Samsung, LG and Sony smart phones have become quite popular in Viet Nam while such brands as Huawei and Oppo of China, with comparable designs and functions, are also selected by the youth.

Viet Nam has 52 million Internet users, accounting for 54% of the population, ranking 5^th in Asia-Pacific in terms of Internet access, just after China, India, Japan and Indonesia. Viet Nam is also a country with high rate of mobile phone users (around 55% of them are smart phone users). It is forecast that by 2020, Viet Nam will be among top contries in the region in terms of mobile phone users. This is an important foundation and great opportunity for potential investors to market their products and services to the vast potential consumer base in Viet Nam.

Ladies and gentlement

The results gained by Viet Nam so far have been an important driving force and encouragement for Viet Nam to remain confident and steadfast to grow stronger in the years to come. We are determined to build an action-oriented and enabling Government in service of people and businesses. We will accelerate international integration; continue to pay due attention to macroeconomic stability, instutional and policy reforms, sustainable development, job creation and income raising for the people.

In the coming years, wee will focus on the following orientations.

Firstly, we will continue improving the quality of institutions, laws and policies, promote the rule of law, encourage the development of private sector, strengthen governance capacity, maintain macroeconomic stability towards sustainable growth, ensure nonstop social progresses, help the low income groups to catch up with the middle groups. The desire for richness is the key to keep the dynamism at the active circle between the growth of the the middle class and economic growth.

We will focus on investing in infrastructure development to connect urban areas to the countryside, mountainous, remote and disadvantaged regions; pay great attention to the development of the healthcare and education system, reducing income disparity, and improving social security network to protect people vulnerable to negative shocks.

Secondly, we will foster the startup and innovation economy through commitments to assist and enable the incubation and realization of startup ideas. Viet Nam pledges to protect innovative ideas and new inventions in startup economy and ensure intellectual property rights as stipulated in the Law on Intellectual Property Rights as well as in the free trade agreements to which Viet Nam is a signatory. Economic dynamism, open Internet policy, and enabling conditions for the businesses have generated numerous opportunities for startup entrepreneurs in Viet Nam. We wish to call on investors to participate and hope there will be more startups and venture funds in Viet Nam to further encourage strong startup spirit in our country.

Thirdly, we will carry out tax reforms to increase the competitiveness of the economy with an aim for the OECD’s higher standards on transparency, fairness, and efficiency. At present, Viet Nam’s corporate tax is at 20% and will be redued to 15-17% under the upcoming tax reform roadmap to support businesses. Besides competitive tax rates, Viet Nam has also put in place many tax incentives for investors in priority fields like high technology, auxialiary industries, high-tech agriculture, or labor intensive industries,. etc.

Ladies and gentlemen,

In our vision for the next decade, Viet Nam aims to be a dynamic innovation-based economy. With six thematic discussion sessions: Agriculture, finance, education and heathcare, infrastructure, special economic zones, startup and innovation, the Summit will generate multiple opprotunties for cooperation and investment in Viet Nam and we shall walk together toward the theme of APEC 2017: “Creating new dynamism, fostering a shared future” for Asia-Pacific for peace, stability, integration, dynamic growth and prosperity.

Thank you very much./.