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Prime Minister addresses Vietnam Business Summit 2017

Released at: 16:11, 08/11/2017 APEC Viet Nam 2017

Prime Minister addresses Vietnam Business Summit 2017

Photo from apec2017.vn

Vietnam today has a population of almost 95 million, a young population structure with more than 60 per cent aged under 35, and rapidly rising incomes, especially among the burgeoning middle class, PM Nguyen Xuan Phuc tells Summit.

by Nguyen Quoc

Prime Minister Nguyen Xuan Phuc delivered an address to the Vietnam Business Summit, which opened on November 7 in the central city of Da Nang as part of the 2017 APEC Economic Leaders’ Week.

The following is the full text of his address, as released by the Vietnam News Agency.

Vietnam Business Summit 2017
Vietnam: Integration, Dynamic Reform and Comprehensive Development

Ms. Victoria Kwakwa, World Bank Vice President for East Asia - Pacific,
Mr. Philipp Rösler, Managing Director, World Economic Forum,
Excellencies Ambassadors, Heads of diplomatic missions and international organizations in Vietnam,
Vietnamese and foreign experts, investors and businesspeople.

On behalf of the Government of Vietnam, I would like to convey my warmest welcome to all distinguished delegates and guests attending the Vietnam Business Summit on the occasion of the 2017 APEC Economic Leaders’ Week. May I extend my warmest greetings to all distinguished guests and delegations, representatives from organizations and enterprises, and experts and investors, Vietnamese and international alike.

Along with many APEC events and activities, the Vietnam Business Summit is held in Da Nang and the ancient city of Hoi An - a vibrant trading post dating back to the early 17th century that received merchant fleets from Japan, China, India and Europe, laying the foundation for the development of trade relations for the past few hundred years. Today Vietnam is still working hard to improve ourselves, to continue to be a potential and “reliable trade partner” to the international business communities and other countries. According to AmCham Singapore in September 2017, 56 per cent of businesses surveyed considered Vietnam their best trade partner.

A report by the World Bank (WB) pointed out that Vietnam’s economic transformation during the last 30 years is deeply significant. With the implementation of profound economic reforms that resulted in high GDP growth of average 7 per cent per year, incomes have increased accordingly. In 2017, GDP growth is expected to reach 6.7 per cent and we have set a target of 6.5 to 7 per cent between 2016 and 2020. Average income per capita has increased to $2,300 (or $6,800 on a purchasing power parity basis).

According to the WB’s “Report 2035” released in 2016, at present the middle class accounts for about 10 per cent of Vietnam’s population and is expected to increase to 50 per cent by 2035. This has helped boost demand in the economy and created many better jobs. Not only in the domestic market, Vietnam has also step by step partaken in value chains and production networks within the APEC region and the world. Rapidly growing income and the expanding middle class have changed the consumption pattern of the economy, thus opening new opportunities for investors and move ahead with the new trend.

Vietnam has shown its dynamism by its active international integration and strong support for global free trade. We have signed and joined 12 free trade agreements (FTAs) and are negotiating an additional four, including those with 18 partners who are APEC economies.

Ten years after our accession to the WTO, Vietnam’s export-import turnover in 2017 quadrupled, to more than $400 billion, equivalent to 170 per cent of GDP. We are making efforts to substantially improve the business and investment environment. At present, there are more than 24,200 FDI projects hailing from 120 countries and territories in operation in Vietnam, with total registered capital exceeding $310 billion, or 155 per cent of GDP. Among them, FDI capital from APEC economies alone amounts to $250 billion, accounting for nearly 80 per cent of total FDI capital into Vietnam over the past three decades. Many leading economic groups from APEC economies have selected Vietnam to develop their regional production hubs for their global value chain.

According to prestigious international organizations as well as many entrepreneurs and investors, the competitiveness of and the business environment in Vietnam have been substantially improved. The World Economic Forum (WEF) ranked Vietnam’s Global Competitive Index (GCI 2017-2018) 55th out of 137 countries, jumping 20 ranks over five years. Vietnam’s market size ranks 31st out of 137. According to the WB in a report published on October 31, 2017, Vietnam’s 2018 Doing Business ranking is 68th out of 190 countries, an increase of 14 ranks compared to the previous year (ASEAN 5 Group). The World Intellectual Property Organization (WIPO) published their 2017 Global Innovation Index report in May 2017, which showed that Vietnam advanced to rank 47th among 127 countries and economies, a 12-rank jump.

Ladies and Gentlemen,

Vietnam today has a population of almost 95 million, a young population structure with more than 60 per cent under 35, and rapidly rising incomes, especially among the burgeoning middle class. On average, between 2007 and 2016, consumption of the household sector accounted for 67.3 per cent of GDP and increased 16 per cent per year. Domestic consumption has become an important driver for Vietnam’s economic growth in addition to the export sector. This growing income has made Vietnam ever more attractive to consumer goods producers, especially well-known foreign brands. Apple, Samsung, LG, and Sony smartphones are quite popular in Vietnam, while brands such as China’s Huawei and Oppo, with comparable design and functions, are also selected by young people.

Vietnam has 52 million internet users, accounting for 54 per cent of the population, ranking its fifth in the Asia-Pacific in terms of internet access after China, India, Japan, and Indonesia. With 55 per cent of its people having smartphones, it is projected that by 2020, Vietnam will be among the leading countries in the region in terms of mobile users. This is both an important foundation and a major opportunity for potential investors to market their products and services to the vast potential customer base in Vietnam.

Ladies and Gentlemen,

The results that Vietnam has achieved until now is an important encouragement for us to remain confident and steadfast to grow stronger in the years to come. We are determined to build an action-oriented, enabling government in service of the people and businesses. We will accelerate international integration. We will continue to pay due attention to macroeconomic stability, institutional and legal policy reform, sustainable development, job creation, and raising incomes. In the coming years, we will focus on the following solutions:

First, we will continue to improve the legal, institutional and policy frameworks, promote the rule of law, encourage the private sector’s development, strengthen State governance capacity, maintain macroeconomic stability towards sustainable growth, ensure social progress, and help the low-income group catch up with middle-income and better-off groups. The entrepreneurial spirit to enrich oneself is key to keep the dynamism of the active circle between the growth of the middle class and economic growth.

We will focus on investing in infrastructure connecting urban areas to the countryside, mountainous regions, and remote areas. Vietnam pays great attention to the development of the healthcare and education systems, reducing the income gap while improving the social welfare network to protect disadvantaged and vulnerable groups from negative shocks.

Second, we will foster startups and the innovation economy through commitments to assist and enable the incubation and realization of startup ideas. Vietnam pledges to protect innovative ideas and new inventions in the startup economy and will ensure intellectual property rights within the framework of the Intellectual Property Law as well as within the FTAs that Vietnam is party to. The dynamism of the economy, an open internet policy, and the enabling conditions for doing business are creating major opportunities for startup entrepreneurs in Vietnam. We wish to call on investors to participate, and hope there will be more startups and venture funds operating in Vietnam to further encourage the strong startup spirit in our country.

Third, we will carry out tax reforms towards greater competitiveness for the economy, with an aim for the OECD’s high standards for transparency, fairness and efficiency. Presently Vietnam’s corporate income tax is at 20 per cent and will be reduced to 15 to 17 per cent according to the upcoming tax reform timetable to support the business community. Apart from the competitive tax rate, Vietnam also puts in place many tax incentives for investors in priority areas such as high-tech industries, supporting industries, high-tech agri-business and labor-intensive industries.

Ladies and Gentlemen,

In the vision for the next decade, Vietnam aims to become a dynamic, innovation-based economy. The Vietnam Business Summit today has six thematic sessions on agriculture, finance, education and health, infrastructure, special economic zones, and startups and innovation. These will generate multiple opportunities for cooperation and investment in Vietnam, and we shall work together towards the theme of APEC 2017, “Creating New Dynamism, Fostering a Shared Future”, for the Asia-Pacific, for peace, stability, integration, dynamic development and prosperity.

May the 2017 Vietnam Business Summit be a great success!

Thank you.

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