Notable successes
Vietnam’s most remarkable achievement over the past year was demonstrated through impressive statistics, including an economic growth rate of 8.5 percent, a record foreign direct investment of US$20.3 billion and an export turnover of approximately US$59 billion.

Generally, most Vietnamese enterprises’ competitive capacity were strong enough to cope with challenges while foreign invested enterprises saw spectacular development with their revenue accounting for 56.9 percent of the country’s total export turnover.

Deputy Director of the National Assembly Committee for External Relations Ngo Quang Xuan said that the most impressive thing was that the inflow of FDI in Vietnam in 2007 was as high as the combined figures of the five-year period (2000-2006) thanks to the strong interest of foreign investors in Vietnam after its entry to the WTO.

Despite the limited level of disbursed capital, the figure of US$23 billion in FDI attraction showed foreign investors’ confidence in the country’s improved business environment.

Over the past year, remarkable progress was made in the financial-banking sector as the capital flows transmitted through the banking system hit a record high in the past 20 years.

2007 was also a successful year for foreign banks in Vietnam, in particular, non-banking financial organizations.

Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc said that one year after gaining WTO membership, Vietnamese entrepreneurs felt more confident and were more fully aware of their path ahead.

Thanks to the improved economic environment, Vietnamese enterprises’ business administration and operations were improved significantly and placed in the long-term global vision.

Legal documents continue to be revamped
When joining the WTO, facing troubles and disputes is unavoidable. Therefore, the legal system plays a key role in settling disputes. Regarding the building of law-regulated documents to facilitate Vietnam’s implementation of its WTO commitments, Deputy Minister of Justice Hoang The Lien said the building of law-regulated documents by relevant agencies over the past year was accelerated, even faster than the country’s WTO negotiation period. The quality of the documents in line with international commitments helped the system of international trade and economic documents integrate faster into the international practices.

However, Mr Lien said that some documents were not good enough to keep pace with the commitment roadmap while the relevant agencies were still in a difficult position to bring the legal system to life since the law enforcement remains loose and ineffective.

Nguyen Hoang Luu, Vice Chairman of the Vietnam Association of Small- and medium-sized Enterprises, complained about the judicial and law-enforcement systems, which he said have many limits such as excessive procedures, high costs and intransparency. Public administration services remain poor with heavy bureaucracy and corruption, while the reforms of this sector are taking place slowly.

Mr Lien held that in the coming time, Vietnam should review legal documents concerning its commitments to the WTO.

Violation of intellectual property rights is currently a burning issue, which inflicts losses on both foreign and domestic enterprises. The issue has many aspects such as appropriating trademarks, faking, knock-off copy, or disputes.

The National Office of Intellectual Property remarks that Vietnam has made constant efforts in protecting intellectual property (IP) rights in line with international standards. The World Intellectual Property Organization (WIPO) has agreed that Vietnam now has an advanced IP legal system with only some minor defects.

Other difficulties ahead

Economists said that in order to enhance its competitiveness in the WTO, Vietnam should step up its administrative reforms, effectively curb corruption and bureaucracy, and promulgate legal documents in a simple, practical, consistent and standardized manner.

They also suggested reforming the education sector and upgrading infrastructure, especially the country’s systems of seaports and power plants.

Ngo Quang Xuan said that Vietnam needs to accelerate the disbursement and increase the efficiency of investment sources. The country should also adopt a rational investment structure with due attention to strategic and rural projects.

Minister of Commerce and Industry Vu Huy Hoang openly mentioned great challenges such as two-digit trade deficit, overloaded infrastructure and a severe shortage of high-skilled workers, especially technicians and practical engineers, even in economic hubs like Hanoi and HCM City.

Nguyen Hoang Lu elaborated on the problems concerning the labour force: “Nearly 30 percent of the workers are untrained. To make it worse, they are distributed unequally among regions and used inefficiently.”

The Chairman of the VCCI said that given poor infrastructure and low-quality human resources, the investment by enterprises becomes important and inevitable in addition to that of the government.