IT hopes battered by piracy, red tape
Rampant piracy, limited Internet access and an official insistence that imported software remains classified as 'cultural material' are preventing Vietnam's nascent information-technology industry from developing anywhere near its full potential, according to sources.
Microsoft estimates up to 98 per cent of its software in use in Vietnam is not licensed and the company's country manager, Ngo Phuc Cuong, said despite extensive consultations with government, little progress appears to have been made towards unravelling the multiple strictures that stunt the industry.
'Piracy remains an enormous problem, but even the government does not comply [to it's own laws] . . . most government offices work with pirated software,' he said.
An industry conference held in Ho Chi Minh City last month was told if piracy was reduced by 30 to 40 per cent, the output of software firms could be increased by as much as four times the existing output.
The situation has driven the country's software producers to the wall, with four of the biggest companies facing closure.
Mr Cuong said taxes on imported CD-Roms prevented local software developers from using existing Microsoft applications to expand their products, and that the Customs Department's insistence that all CD-Roms were 'cultural products' rather than industrial products imposed huge costs and delivery delays.
'Customs imposes a duty of about 40 per cent on all CD-Roms, and even though we can buy them for US$2 each, Customs defines them as 'cultural products' and values them at $15,' he said.
'If you wanted to import Microsoft Developer Network, it comes in a standard package of eight 150 CD-Rom shipments a year.
'Subscription costs just $2,500, but each shipment has a duty of $900 imposed on it, meaning customers must pay nearly three times more than the cost of the product in import duties.' Mr Cuong said each CD needed to be inspected by a censor under Vietnam's tough regulations covering the import of 'cultural materials', which led to unacceptable delays in receiving shipments.
An industry source said censorship fees had been levied at 60 cents per imported disk, and software producers had to package their products through a licensed local publishing house that added a further 5 per cent to the cost for consumers.
'Software producers have legal status, but they are unable to launch their own products under their own names,' the source said.
'CD-Roms for export also have to pay a censorship fee of about $1.40 which is a significant cost imposition on manufacturing for the export sector,' he said.
The difficulties facing the industry also have retarded on-the-job training plans to ensure a sufficient pool of human talent is available for expansion.
Despite the problems, two international standard training centres were opened in Ho Chi Minh and Hanoi on Monday as part of an Indian aid package to promote the Vietnam IT industry.
'It is a matter of fact that the local software-making workforce is inadequate in both quantity and quality,' managing director of the Hanoi training centre, Nguyen Khac Thanh, said.
'Usually, IT companies have to retrain their new [graduate] employees to help them get real experience,' he told the Vietnam News daily this week.
However, Mr Cuong said reforms were required if the industry was to benefit from any amount of training.
'Vietnam could be a major producer of IT,' Mr Cuong said.
'There is a pool of people who are enthusiastic and bright. Vietnamese consistently win international mathematics competitions.
'Certainly they need training in English, but even with that training the current situation means it is unlikely they will be able to apply their talents.' VIETNAM
