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Speeches & Transcripts June 30, 2020

How to attract more FDI to Hanoi in the post Covid-19 era?

Excellency Prime Minister Nguyen Xuan Phuc

Excellency Hanoi Party Secretary Vuong Dinh Hue

Excellency Hanoi Chairman Nguyen Duc Chung

Leaders of National Assembly, Government Ministries and Agencies, Private Sectors, Diplomatic Corps,

Distinguished guests, Ladies and Gentlemen

Very good morning!

It is my great honor and privilege to join the Hanoi 2020 - Investment and Development Cooperation Conference today.

I have been requested by the organizer to speak on how to attract more FDI to Hanoi in the post Covid-19 era.

This question is both timely and strategic for the strong and sustainable development of our beautiful Capital City. If the Covid-19 crisis has had unprecedented negative impact on our health, economic and social lives, it is also bringing about unprecedented opportunities for development. One of those is the reallocation of production facilities by multinational companies that want to diversify their risks. The pandemics has revealed that many companies have today excessively concentrated their production facilities, exacerbating the risk of disruption in strategic value chains such as health related products, electronics, and automobile, to name a few.

I believe that this move toward further diversification by multinational companies offers a great opportunity for Vietnam, in particular for Hanoi.

The challenge for Hanoi is now to move forward and turn this opportunity into reality. To illustrate what have in mind, allow me to use an example from my personal life.

Two weeks ago, I had lunch with one of my Senegalese compatriots, Pape Omar Faye. Many of you probably know him, because he is playing for Hanoi Football Club, wining the Vietnamese Super Cup in 2018 and the League 1 Cup in 2019. Omar scored 16 goals and was the top V league scorer.

I am sharing Omar’s story and journey in Vietnam because it offers several lessons for the city. First, Omar came to Vietnam as he was able to find the right environment for developing his talent. Like him, many multinationals can find the right environment for their operations in Vietnam. Not only the city offers its traditional assets (cheap and productive labor, political stability, relatively good connective infrastructure), but its extraordinary management of the COVID-19 crisis has been the best promotion tool. Timing is important for attracting FDI, and today is definitely a good time for Vietnam and Hanoi.  

The second lesson is that Omar was not on his own, but he contributed to the success of his team by playing collectively with local talents such as Do Hung Dung, Nguyen Van Quyet, Doan Van Hau and Nguyen Quang Hai, to name a few. Attracting strong FDI inflows to Hanoi is important but it is even more important for FDI companies to establish strong linkages with domestic enterprises. The city can facilitate these synergies by identifying local firms that have the capacities to become viable supporting partners to FDI enterprises. The Government can provide financial and technical assistance to these local companies and so help them upgrade their performance, notably in sectors where quality matters such as digital, education and medical services.  

The third lesson is that Omar, as a foreign player, brought his talent and rich skill set that have then inspired his teammates. Likewise, quality FDI flows should enable technology transfer as well as skill development. After all, coach Park Hang-seo of the national team can be considered as a quality FDI. So, selectivity of FDIs matters. Hanoi can incentivize FDI companies through appropriate licensing and supporting policies to encourage workforce training as well as know-how transfer to local businesses. The city should also prepare its own workforce to enhance its knowledge and skill absorption capacity. It could do so through comprehensive reforms in delivering technical and vocational training – with enhanced collaboration between public and private sectors. Computer literacy, foreign language, and sophisticated skill training should be strengthened as part of these reforms.

My fourth and last lesson from Omar’s journey is that his contribution to Vietnamese football has increased over time. Since his arrival in 2011, he has learned the language and the culture. Hanoi would also want FDI companies not only to come but also to stay in the City, so they can also maximize their contribution. For this to happen, in addition to an enabling regulatory environment, it is critical for the city’s leadership to continue improving living conditions. There is a need to improve urban mobility, sanitation and wastewater treatment, flood control as well as air quality management – hence making Hanoi a livable city. With the recent PPP Law approved by the National Assembly, Hanoi can be a pioneer by creating a dedicated unit, with strong capacity, that will develop such PPP projects in these important urban infrastructure areas.

I would like to close by congratulating Hanoi’s People’s Committee for having organized this series of successful investment conferences in the past several years. These conferences have helped to put the city on the radar screen of many investors, mobilizing not only a large amount of financial resources, but also new ideas, technologies and innovation for the development of the city. I strongly believe that this year will be another success, even more than previous ones.

The World Bank has been a strong and trusted partner of Hanoi, and we will always be ready to provide our support to advance the City’s prosperity and development.

Thank you.

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