The European Chamber of Commerce in Vietnam (EuroCham) has suggested a range of policy recommendations to help improve the Vietnamese investment environment.

EuroCham said current financial policies unfairly favour large banks 

Their assessments and proposals were included in the White Book 2012, which was officially released on December 1.

“In the absence of robust and effective enforcement of intellectual property rights (IPR), foreign companies remain reticent to transfer their valuable IPR and proprietary know-how which is necessary to support ‘higher-quality’ value added manufacturing in Vietnam,” said Eurocham Managing Director Dr. Matthias Duhn.

According to Duhn, in order to improve the situation, the Vietnamese Government should effectively enforce intellectual property rights by increasing efforts to raise public awareness about the value of IPR protection, and instructing authorities at all levels to enhance administrative and judicial enforcement of IPR as a deterrent.

Vietnam should move to a comprehensive ‘one-stop shop’ approval for business registration and investment licensing in order to cut red tape, another EuroCham offical proposed.

Concerning human resource training, EuroCham representatives said European companies wanted to hire Vietnamese staff to save costs. However, experts said that over 65% of Vietnam’s workforce remained unskilled, and 78% of the 20 to 24 years olds are either unskilled or under-trained. This has forced them to employ European specialists to work in key positions.

EuroCham recommends that employers should be allowed to select the right candidate based on their own discretion and internal process.

The country should pay more attention to heightening of the quality of banks rather than the quantity, as several banks are unprofitable.

Resolution 11 limits credit growth to no more than 20% in 2011 but the application of a single growth rate to all banks, regardless of their capital reserves, risk management capabilities, nature of their lending to productive parts of the economy, or any other objective criteria, will not yield the best results for the Vietnamese economy, EuroCham asserted.

It warned that such a policy rewards the size of a bank rather than its quality, penalising small, but efficient banks.

European companies reiterated their recommendation of recent few years that the Government allow foreign banks to increase their strategic shareholding in the Vietnamese banking sector as part of efforts to consolidate the market.

In the time to come, European pharmaceutical companies expected that the Vietnamese Government would allow price adjustments for pharmaceutical products to keep up with the fluctuations in foreign exchange rates.

Currently, many foreign enterprises are hesitating over investing in infrastructure projects due to inefficient risk-allocation, complicated administrative requirements, a lack transparency in bidding procedures, and costly and time-consuming land clearance for many projects.

With regards to power supply, Vietnam should adjust energy prices to regional levels in order to attract investment in power projects and boost power supply. The Government should also reduce the dominance of the state-owned Electricity of Vietnam Group (EVN) by allowing private firms to join the market.