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US on track to be top investor in Vietnam

13 May 2009

US on track to be top investor in Vietnam

HANOI (AFP) - The United States is on track to become the leading foreign direct investor in communist Vietnam, more than 30 years after the end of their war, the head of a US business delegation said Wednesday.

"I’m willing to wager... that within no more than three years — and perhaps a good deal less — the United States will be the largest foreign direct investor in Vietnam," Matthew Daley, president of the US-ASEAN Business Council, told reporters.

"I think the trend lines are clear."

He said that in the first quarter of this year, Vietnam registered about six billion dollars in foreign direct investment, more than half of which, about 3.86 billion dollars, came from American firms.

The Washington-based US-ASEAN Business Council represents more than 100 US companies. Representatives of 15 of them have joined Daley on a three-day mission that began Wednesday to explore opportunities in Vietnam.

Following the war which ended with Vietnam’s reunification in 1975, the US did not lift a trade embargo until 1994. Diplomatic relations were normalised a year later.

Daley says the United States is either the sixth or 10th-ranked foreign investor in Vietnam, depending on which figures are used.

"American interest, as evidenced by investment in Vietnam, has been growing dramatically," he said.

The delegation will meet with government leaders and executives from state-owned enterprises during their mission, which is an annual event.

Daley said the presence of 15 US companies during a global economic downturn says much about their perceptions of Vietnam’s potential. It also speaks to "the frame of mind of the country and the government regarding participation in these activities by the foreign business community."

Stuart Dean, regional president of GE, said his firm got "great support" from Vietnamese authorities to allow quick construction of his company’s first manufacturing investment in Vietnam. The firm broke ground in Haiphong on Tuesday for a plant to build wind turbine components.

"We’re excited about doing more here, particularly in the infrastructure area," he told the press conference.

Foreign businesspeople have expressed concern about the state of Vietnam’s roads, utilities and other infrastructure, as well as corruption, and the extent of reform at state-owned businesses.

Hank Tomlinson, president of Chevron Vietnam, said at the same briefing that his firm and partners had already invested more than 300 million dollars towards a gas project in southern Vietnam.

The company was in the final stages of negotiations with state-owned PetroVietnam before final approval to begin engineering work, he said.

The project would then require another four billion dollars’ worth of investment, 2.5 billion of that from Chevron which would make the US company "the single largest investor in Vietnam," Tomlinson said.

In June last year the US and Vietnam agreed to begin talks for a bilateral investment treaty.

Daley said he believed those negotiations would go forward under the administration of US President Barack Obama, who took office this year.

 source: AFP