The Saigon Times Daily: What is your comment on Project 30?

- Alain Cany: It’s progressing very well, but the concrete result is still to be seen to be effective. It needs some time for the initiative to be operative at provincial and local levels. The momentum is there, the readiness of the officials of the Government is there. But I’m less impressed by a few ministries and provinces. Some ministries are less responsive to the initiative. Some provinces are very good in supporting the project, while some are less open. That’s why we strongly believe that it’s time for the private sector to step in, and the media to relate so that a great result can be achieved. The initiative must be implemented as soon as possible, and the effectiveness at local level should take months, not years.

What are your suggestions to ensure effective administrative reform?

- While we have seen that the administrative reform has yielded some impressive results so far, the full impact of Project 30 may only become fully clear by the end of 2010. The long-term success of the project will largely depend on the current good momentum to be kept. I think that it is particularly important to implement and apply all recommendations especially on the provincial level. It is crucial that no new body dealing with administrative procedures emerges whilst Project 30 is still ongoing. This would be counterproductive and undermine current efforts. We have seen that the Government has passed Decree 63/2010/ND-CP, effective from October 14, 2010, setting up a “post-Project 30 mechanism” to filter the flow of new APs (administrative procedures) as well as the establishment of a new agency on controlling APs.

Do you see the prospect of more investment from Europe in Vietnam in the coming years despite some obstacles?

- We are confident that Vietnam will continue to attract high FDI in the future as it remains competitive, but there are still important weaknesses in the Vietnamese economy that should be dealt with. The trade deficit at about 10% of GDP needs to be kept in check, inflation should be kept below 8-9% maximum in an environment of 6-7% economic growth and the weakness of the Vietnam dong needs to be addressed. Despite reforming administrative procedures, the Government also needs to continue to improve the legal environment in Vietnam. Other ASEAN countries have a very effective “one stop shop” system in place for foreign investment. The investment process in Vietnam currently takes too long and poses unnecessary difficulties to foreign investors. The fundamentals of Vietnam as a destination for investment remain solid, but these issues need to be dealt with to ensure an increasing inflow of FDI.

It seems that European investors are shifting from investment in manufacturing in Vietnam to investment in infrastructure. What do you think?

- When we are looking at the economic development of Vietnam, it becomes clear that infrastructure bottlenecks and limited supply chain capacity are limiting the growth of the country. The needs for infrastructure in Vietnam are so great that the Government cannot be expected to handle the financial burden alone. So private sector participation in infrastructure development is crucial. There are certainly many willing partners for infrastructure projects in Europe and elsewhere, but Vietnam needs to improve its legal and regulatory framework to attract and facilitate private sector financing of infrastructure. Public-private partnerships need to be encouraged and strengthened and private investors in infrastructure need to be able to make due profits on these projects. The vast need for foreign private investment in infrastructure improvement should ensure that potential investor will focus on this, but the aforementioned issues should be addressed before a significant shift in investment will be realized.