Korean businesses believe in the prospects in Vietnam at present, but are concerned about the future when Vietnam passes through the golden population period and the electricity shortage problem is not resolved soon.
Mr. Hong Sun, Chairman of the Korean Business Association in Vietnam discussion on the sidelines of the annual Vietnam Business Forum (VBF) in 2024.
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| Mr. Hong Sun, Chairman of the Korean Business Association in Vietnam. |
How do you assess the prospects of Korean investment flows into Vietnam in 2024?
We think that the global economy is recovering well and Korean businesses are confident in expanding investment in Vietnam. But new investment deals will be relatively limited, most Korean businesses that can afford to go abroad are already present in Vietnam. The important thing is to retain those businesses, making them confident in continuing to expand their operations here. Therefore, Vietnam must continue to provide and create favorable conditions for foreign investors.
Vietnam is in the golden population period, with the best and most beautiful population structure. But this period does not last forever, only limited to another 10-15 years. Later, when people's backs are bent but the economy has not developed, if all foreign investors withdraw and only domestic businesses remain, it will be very dangerous for Vietnam.
Now is an important time for the future. If we don't try harder, the next 10 years will be very difficult. Many foreign businesses in general and Korean businesses in particular are quite worried about Vietnam's future. 10-15 years from now, we are not sure if Vietnam will be as attractive, young, dynamic and full of potential as it is now. If Vietnam does not quickly resolve difficulties and problems now, it will be difficult to continue to retain investors in the future.
To solve the worries of foreign invested businesses in general and Korean businesses in particular when looking to the future, in your opinion, what is the most urgent problem facing Vietnam today?
The most pressing issue today is still infrastructure, especially power sources. When the Korean Ministry of Industry and Trade planned industrial development, they planned electricity development first. Without electricity there is no industry. Steel production, semiconductor production, screens, batteries... all use electricity, so Korea needs to ensure a huge power source.
During the period from June to July 6, many areas in Northern Vietnam (Bac Ninh, Hai Duong, Ha Nam, Phu Tho, Vinh Phuc...) experienced power cuts due to lack of electricity. Some industrial zones also conduct power cuts with prior notice, with a frequency of about 7-2023 times/week.
The Vietnamese government is also aware that electricity shortage is a major obstacle to attracting foreign investment and improving the production competitiveness of Vietnamese enterprises. There have been many efforts to propose solutions, but this is a problem that is difficult to solve in a short time.
For Korean businesses wishing to invest in Vietnam, especially high-tech businesses such as semiconductors, Vietnam's electricity shortage is one of the big factors making them hesitate in making decisions. invest. Korean companies are currently very interested in industries that use a lot of technology, in line with environmentally friendly trends such as rooftop solar power, but are still hesitant.
The stance of other global businesses in the industrial sector that the Vietnamese Government wants to attract investment is similar.
So is there anything Korean businesses can do to support Vietnam in solving the urgent electricity problem?
As we reported to Prime Minister Pham Minh Chinh, we have invested in an LNG gas power port in Vietnam. In the future, if Vietnam accepts, we are ready to invest in developing nuclear power. Regarding nuclear power, we are number 1. Korea is managing, operating and exporting many nuclear power plants around the world. When Vietnam accepts nuclear power, we are ready to invest and cooperate to help Vietnam achieve the Net Zero goal by 2050.
In addition to the issue of electricity shortage, we cannot help but mention the delay of domestic businesses in participating in the global supply chain, sir?
Currently, very few Vietnamese businesses are interested in participating in the global supply chain. We have large world-class corporations such as Samsung, LG..., but not many Vietnamese companies participate in our supply chain, which is a pity.
Samsung entered Vietnam in 2008 and has been producing phones for 16 years. During that time, there have not been a significant number of businesses like Korean support businesses participating in the chain. Vietnam still makes simple services such as packaging and food, not high technology or important components.
We expect and are ready to create all conditions for Vietnamese businesses to join the chain. If the quality of products from Vietnamese and foreign enterprises is the same, we will prioritize buying from Vietnamese enterprises, but it is still very difficult to find.
