Vietnam IZs Urged To Upgrade Infrastructure
Solution of Japan
According to Hideo Okubo, the Chairman of Forval Corporation, concurrently Chairman of the supporting committee for globalization of SMEs - Japanese Business Association, Japan is facing a raft of difficulties including low birth rate, aging population, slowdown of goods consumption, a domestic economy and export outlook that in the doldrums, and declining competitiveness for Japanese brands in the global market compared with other Asian countries due to the natural disaster last year. In response, the Japanese government is drawing up a program to support investment abroad for Japanese enterprises. Under this program, the Japanese Ministry of Economics, Trade and Industry established the supporting committee for globalization of SMEs. Therefore, this is a favorable time for Vietnam to attract investment from Japanese SMEs.
The Japan Department for Management of SMEs reported that, 97.3 percent of 220,000 Japanese companies operating in the manufacturing sector have not initiated investment abroad, despite their keenness. Therefore, by satisfying their needs, this is a good opportunity for Vietnam to develop support industries and also provide a premise for Vietnam to become a modern industrialized nation by 2020.
If Vietnam develops its support industry then it would attract not only Japanese investors but also big investors from around the world. Masahiko Komura, the former Minister of Foreign Affairs of Japan said that Japan wants to help Vietnam realize its target of becoming a modern industrialized nation by 2020. However, Japanese investors remain concerned that weak Vietnamese support industries mean higher costs to import materials and accessories from abroad for production. Vietnam would be able to attract many major Japanese investors if they could resolve this weak point.
Suggestions for Vietnam
So what specifically do Japanese SMEs care about, in terms of the investment environment in Vietnam and how can Vietnam attract Japanese enterprises to invest in the IZs?
Hideo Okubo said popular IZs globally which have attracted many Japanese investors include the Amata Nakorn Industrial Estate in Thailand; Delta Silicon Industrial Park in Indonesia and urban development around Chennai in India.
Most of these IZs are attractive to Japanese investors as they have favorable locations with good infrastructure including services like banks, shopping centers, schools, hospitals and are near airports and seaports, which ultimately are designed to form a wider urban area allowing employees to live and work in a pleasant environment.
From that reality, Hideo Okubo affirmed that in order to attract investment from Japanese SMEs, Vietnam needs to simplify registration procedures; recruit and train personnel and build training schools; be prepared for a third party to provide informational technology support whenever needed; provide workshops for rent to SMEs between 300-500 sqm in order to avoid too large workshops in some IZs which waste rental costs for enterprises; provide investors with convenient material facilities; support to develop business relations with partners and issue suitable policies to cope with environmental issues.
