The PFI process
Viet Nam undertook a preliminary self-assessment of its policies with the assistance of a consultant from CUTS (Consumer Unity and Trust Society) Hanoi Resource Centre, the regional office of an international NGO based in India. The scoping study included the following chapters of the PFI: investment policy, investment promotion and facilitation, trade and competition policy, and public governance. The results were presented at an APEC High-Level Public-Private Policy Dialogue on the PFI in Melbourne in April 2007.
For each question in the scoping study, the answers were classified under five different categories: policy action, stronger points, weaker points, no action taken or foreseen, and recommendation.
"The investment policy assessment of Viet Nam based on the Policy Framework for Investment constitutes a special effort by the Vietnamese government to revisit its investment strategy... It is our wish that the co-operation between Viet Nam and the OECD continues to expand in the forthcoming future."
Vo Hong Phuc
Minister of Planning and Investment, Government of Viet Nam
A second phase assessment was then undertaken under the responsibility of the OECD and involving a multi-task agency led by the Ministry of Planning and Investment and together with input from the Vietnamese business community. The second phase represented a more detailed assessment, covering most of the questions in the first five chapters, along with the two questions concerning financial sector development in Chapter 9. The results have been published as an OECD Investment Policy Review. Vietnamese authorities, together with the OECD, will review progress in implementing the agreed roadmap for investment reform in two years time.
The PFI assessment highlighted several problems in implementing investment laws and regulations, as well as a lack of coordination between the central and provincial authorities and a need for greater transparency. The PFI assessment pointed to many areas for investment policy reform, thus providing a timely roadmap for improving the legal and regulatory environment, better coordinating the work of the central and provincial authorities and a more efficient use of investment incentives. In addition the assessment also contributed to capacity building within the government.
Starting from a situation in which the economy was essentially closed to foreign investment, Viet Nam has now become one of the most attractive locations for FDI. Following its accession to the WTO at the beginning of 2007, after eight years of negotiations, Viet Nam has moved to unify rules relating to investments in Vietnam by foreign and domestic investors. As part of its commitments, Vietnam promulgated a new Investment Law in 2006.
The PFI assessment has been complemented by many other cooperative initiatives involving international organisations:
- World Bank Investment Climate Assessment of Viet Nam
- IFC Corporate Governance Country Assessment of Viet Nam, June 2006
- UNCTAD Investment Policy Review of Viet Nam, 2007; with subsequent request for IPR follow-up activities
- FIAS and IFC Business Advisory Services have worked on the Viet Nam Land Programme to address provincial and national barriers to small businesses accessing land. FIAS is providing expertise to the national government on a new land code