Thirty-one years after the country was reunified, he said Vietnamese economy has developed vigorously, with a GDP growth rate averaging 7.4 percent since 2000 – one of the highest in Asia. He quoted a recent Merrill Lynch report as saying Vietnam will be the fastest-growing Asian country in the next 10 years, far more exciting than Thailand and other countries in Southeast Asia. That optimism was demonstrated by the Vietnamese Government’s successful bond issuance overseas in October 2005 for the first time. Vietnam planned to earn US$500 million from the bonds, but in fact sales were far beyond expectations, reaching US$750 million.

Mr John noted that Vietnam’s investment environment has been changed for the better. Previously, foreign investors were limited by the business models that were available to them, which in essence consisted of either joint ventures with State enterprises or business co-operation contracts that were heavily, and at times arbitrarily regulated by the Government. Now, foreign firms can diversify into other business models, most notably 100 percent wholly foreign-owned businesses, as well as limited or joint stock companies.

Vietnam has also paid special attention to equitisation of State-owned enterprises (SOEs), which paved the way for foreign businesses to buy shares in SOEs. Sectors that were previously off limits to foreigners, particularly in the financial services, have recently been opened up in anticipation of entry to the World Trade Organisation (WTO).

To obtain such impressive achievements in the past 20 years, Vietnamese leaders have implemented economic reforms at their own pace, taking carefully calibrated steps toward opening the country's markets and dismantling the strict limitations of its past centrally planned economy.

There have already been several noteworthy reforms, many offering foreign investors greater legal protection than ever before. Changes to the legal framework, specifically the Unified Enterprise Law (UEL) and the Common Investment Law (CIL), promise to level the competitive playing field for foreign and domestic businesses.

The 1997-1998 Asian financial crisis, in addition to its consequences, helped change perceptions among Vietnam's top leadership about the future role foreign capital should play in the country's development. The Vietnamese Government’s efforts to join the World Trade Organisation are among typical examples of this change in thinking.

Multilateral lenders, who for years lamented the perceived slow pace of economic reforms, are now singing the Government's praises.

"There is strong investor confidence in Vietnam's future; it has one of the fastest growth potentials in the world," said Liqun Jin, vice president of the Asian Development Bank, at a recent investment forum. "The challenges ahead are formidable but manageable if the Government continues the excellent reforms that it has started."

He said the biggest challenge Vietnam faces competing in the global economy after it enters the World Trade Organisation (WTO) would be the ongoing issue of public administrative reform.

Julie Hunter, head of the debt capital markets for the ANZ Bank, said: "International investors will require a local rating system/infrastructure to know more about the viability of Vietnamese companies and markets, which is not in place, but interestingly, they are investing already."

Dominic Scriven, co-founder of Dragon Capital, noted that "the largest obstacle that the Government faces is overcoming the lack of understanding about how progress should happen and be encouraged throughout the Government. It's not good enough that a handful of leaders understand, those below them also need to understand and be able to carry out the plan."

Mr John noted that Japan has become Asia's largest and Vietnam's third biggest foreign investor thanks to the country’s cheap labour and improved investment environment. Its leading giants such as Yamaha, Canon and Toyota have shifted its global production strategies to Vietnam. 

Twenty years after implementing the Doi Moi (Renewal) process, Vietnam is not only the destination for small- and medium-sized enterprises, but also powerful global economic giants.