Tadashi, who currently is the Managing Executive Officer and Global Head of the Infrastructure Finance Group based in Tokyo, told in an interview that for a long-term strategy, Ho Chi Minh City in particular, and Vietnam in general should make some changes in their current foreign investment policies in order to become less dependent on ODA (Official Development Assistance) funded by the Japanese government.

What kind of changes need to be made?

I suggest that your government should apply a Public – Private – Partnerships scheme (PPPs) to mobilize resources from both public and private sectors to invest in some fields that may benefit urban economic and infrastructure development. Also, ODA must be used in an effective way because Vietnam is currently Japan’s leading ODA recipient.

However, it is difficult to call for domestic and foreign investment in the form of PPPs due to the big gap between urban and rural areas in Vietnam. Therefore, your country should develop a clear and effective investment policy and know well how to exploit the potential of major economic and commercial centers like Ho Chi Minh City and Hanoi.

PPPs have been mentioned many times in Vietnam, but in reality the scheme is applied in just a few projects. How can we successfully implement PPPs in Vietnam?

To apply PPPs, Vietnam has to make sure that the mechanisms for the selection of foreign and private enterprises for some projects are transparent. And if necessary, your government should provide them with support and detailed advice.

In Ho Chi Minh City, for example, the HCMC Finance and Investment Company (HFIC) could cooperate with the Japan Bank of International Corporation (JBIC) to set up a fund for investment and development. However, using money from the fund for hasty investments can cause losses, so a watchdog should be set up to assess the feasibility of projects.

We have a model of this kind in India and I think it should be applied to Ho Chi Minh City.

Which current projects in Vietnam attract interest from Japanese investors?

Currently, Japanese enterprises have invested into some projects in Hai Phong and have spent JPY130 billion (US$1.67 billion) on the Long Thanh International Airport project in Dong Nai Province.