U.S. Expert Urges Vietnam to Restore Business Confidence amid Dramatic Decline

The Vietnamese government needs to take bold measures to restore business confidence, which saw a dramatic decline this year, Dr. Edmund Malesky, an advisor to the U.S. Agency for International Development said. Mr. Malesky, a lead researcher of the Vietnam Provincial Competitiveness Index (PCI), annually published by the Vietnam Chamber of Commerce and Industry, made the statement in an interview on the sidelines of the Vietnam Business Forum last week.The expert said that the this year’s PCI indicated that just 33% the respondents said they wanted to expand operations in Vietnam in the next two years compared to 75% in the previous years. Macroeconomic risks, including non-performing loans; problems of state-owned enterprises and a lack of transparency in the introduction of new regulations, all dramatically affected business confidence, he said.Businesses had a hard time guessing which new regulations were going to come out and how they would be implemented, the advisor said, adding that they therefore found it hard to plan their future investment.“Vietnamese authorities need to be transparent about how they are dealing with macroeconomic risks and stick with the policies they make,” he advised.“Rapid change in regulations makes businesses nervous,” the official elaborated. According to the latest report of WVB Vietnam Financial Intelligence Services (WVB FISL), Vietnam’s business confidence index fell 13 points from the previous quarter in Q3 and fell below the “neutral” index midpoint of 50 for the first time in the EuroCham’s latest survey. (tuoitrenews.vn Dec 8)