Investors barred from sensitive projects

PUBLISHED : Monday, 14 October, 1996, 12:00am
UPDATED : Monday, 14 October, 1996, 12:00am

Vietnam wants certain sectors off-limits to foreign investors as part of new laws geared to enshrine stricter state control of overseas capital, officials have said.

Senior Ministry of Planning and Investment official Vu Huy Hoang said Vietnam wanted to boost the 'quality and quantity' of investment, but warned some areas would be out of bounds as Hanoi sought to better channel new approvals.

'Like any other . . . state with policies of attracting foreign direct investment, Vietnam is no exception in saving some fields just for state organisations,' said Mr Hoang, director of the ministry's foreign investment department.

'The goals will be to . . . combine big scale projects with the medium and small ones to . . . speed-up exports and serve the aims of industrialisation and modernisation for the whole country.' Mr Hoang's comments came before tomorrow's opening of this year's final session of the National Assembly, Vietnam's parliament.

Amendments to Law on Foreign Investment are expected to dominate debate at the two-week closed-door session.

Vietnam's wary foreign investors see little hope for drastic change in draft amendments set to enshrine a host of established practices.

Documents reveal amendments calling for Vietnam not to grant licences for foreign investment in areas 'detrimental to national security, social order and safety, traditional customs and the ecological environment'.

Debates are expected to decide a more specific schedule.

Also, delegates are expected to confirm drafts allowing preferential treatment for investments in areas that include manufacturing for export, mountainous and poor regions and the harvesting and processing of agricultural and marine products.

The drafts also propose a clearer tax regime and bureaucracy and easier ways to settle disputes but foreign lawyers and seasoned investors remain cautious.

'Mostly we are looking at tinkering, not wholesale changes,' one long-time Asian manufacturer said.

'There is little . . . to make newcomers feel protected or welcome - you are still going to have to get by on sound relations and quiet pragmatism.' Lawyers maintain drafts should be treated with caution, as any amendments could be inserted by the increasingly powerful assembly, which forged a far tougher-than-expected mining law six months ago.

Fresh approvals of foreign-funded projects - mostly joint ventures with state companies - have dropped in the past year, but actual disbursements have been creeping up.

Statistics show investment in the first half of this year is down about 20 per cent on the same period in 1995.