Vietnam needs to think logistically to attract more foreign investment

The rapid growth of Vietnam’s export-oriented manufacturing sector has boosted the demand for logistics services but the government needs to step up its game to be more competitive. 

Clement Blanc, managing director of DHL Global Forwarding Vietnam, shared with VIR that Vietnam had the potential to become a logistics hub in Southeast Asia. 

The country is well placed to benefit from the greater integration in ASEAN and the Greater Mekong Sub-region (GMS).

Vietnam is situated in a very dynamic part of ASEAN, connecting the region with its large neighbour, China. 

It is also centrally located in the community with a long coastline that makes it ideal to increase its shipping volumes and general logistics capabilities.

In addition, according to Blanc, Vietnam is fast becoming a manufacturing hub, especially for high-tech products. 

In the first five months of the year, there was an increase in foreign direct investment of 136% compared to the same period last year, mainly in the processing and manufacturing sectors. 

The strong existing manufacturing base will allow Vietnam freer access to markets around the region.

In-depth studies and business surveys show that trade and investment facilitation are top priorities for business, such as streamlined import procedures, harmonised customs procedures and strengthening facilitation of transport across ASEAN countries. 

In order to become more competitive in the region, Vietnam could work on a few areas such as further improving infrastructure and continuing reforms on customs.

“An area that we highly recommend is to have the new Long Thanh international airport built quickly as the current airport in Ho Chi Minh City is already congested. The country should create a free trade zone around Long Thanh or Cai Mep-Thi Vai port complex which will likely attract logistics investment and help Vietnam towards becoming a hub in Southeast Asia,” Blanc said.

He further noted that logistics companies in Vietnam needed to be aware of how to obtain the tariff preferences under the ASEAN Trade in Goods Agreement (ATIGA) as well as other free trade agreements that ASEAN has negotiated with its trading partners to avail opportunities and expand operations.

Sharing the same view, George Berczely, chairman of the Transportation and Logistics Sector Committee under the EuroCham Vietnam, told VIR that Vietnam ranked comparatively well in terms of the logistics indicators according the World Bank’s report on the ease of doing business, and has shown remarkable improvements over the last few years.

“It is important that the Vietnamese government continues this journey, for example in pushing forward the project to establish a National Single Window in collaboration with the many agencies involved in customs clearance and specialised inspections. Meanwhile, customs resources should continue focusing on high-risk consignments, which means making the process for low-risk consignments faster and easier,” Berczely added.

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