Vietnam's Industrialization Strategy in the Age of Globalization
Creating VNIPA for FDI Promotion
In March 2003, the Japan International Cooperation Agency (JICA) in Vietnam published "The Study on FDI Promotion Strategy in the Socialist Republic of Vietnam." The main conclusion of this report is that Vietnam's current effort to promote FDI is inadequate and has to be greatly revamped. For this purpose, the report proposes the creation of the Vietnam Investment Promotion Agency (VNIPA), a national body at the level of ministries.
VNIPA would function as the main investment promotion agency for the entire nation. It would also serve as a coordinating agency with local DPI's, People's Committees and management boards of EPZs and IZs. VNIPA should also have branch offices in the North, South and Central regions. Given the current administrative structure of Vietnam where local government authorities issue most permits and approvals, VNIPA and its branches cannot act as a "one stop shop" for approval. However, it can become a one stop facilitation center. Commitments of the top political leaders and support from all government authorities are crucial for the success of any FDI promotion program.
The suggested mandate of VNIPA includes the following:
Besides senior management, VNIPA should have three divisions:
Since the quality of staff is critical, efforts must be made to recruit the best individuals possible at competitive salary levels. Once employed, their capabilities must be continuously improved.
VNIPA must undertake a high-level image building campaign to dispel negative images and make people aware that Vietnam is open for business and well on its way to integrating into the world economy. For this purpose, promotional tools must be developed: high quality brochures, investment guides, fact sheets, and newsletters. High quality websites must be designed and maintained.
To effectively market Vietnam, VNIPA should develop a database of potential investors. This information should be utilized by all organizations promoting FDI at national, provincial and local levels. An intranet system should be constructed to connect VNIPA, its branch offices, foreign embassies, etc. for information sharing.
Post-licensing services are very important and need to be drastically improved. Regular dialogues must be conducted with existing investors.
Particular emphasis should be placed on attracting Japanese investors by: (i) resolving existing problems; (ii) setting up IZs and EPZs with good infrastructure; (iii) posting a representative in Japan; (iv) networking with JETRO and other Japanese organizations; and (v) employing a Japanese expert at VNIPA.
The report does not clearly specify the relationship between MPI and the proposed VNIPA. One possibility is to retain the general policy making authority with MPI while actual promotion and service activities related to FDI will be conducted by VNIPA. With proper assignment of mandates between guidance and operation, fruitful cooperation between the two bodies should be possible.