Joining the wave of international integration, the Vietnamese government has recently been more active in communicating with the private sector.
Its efforts include the Vietnam Business Forum and the Economic Forum, two ongoing dialogue channels between the government and the business community. At the same time, more industry associations are actively participating in conversations with government agencies to speak on behalf of their members. In fact, while regulations are being written, the draft is often available and welcomes businesses and the public to offer constructive comments. This has made incremental policy changes more practical than before.
Companies now have multiple tools for advocacy, so they should choose wisely.
One reason for this strengthening connection is the sustained growth in FDI, despite the impact of COVID-19. According to Vietnam’s General Statistics Office, in 2021, the total foreign direct investment (FDI) to Vietnam reached 31.15 billion US dollars, representing 9.2% growth from 2020.
Much of this investment is linked to Vietnam’s location on the eastern part of the Indochina Peninsula, which gives it a strategic position in the region that many multinational corporations are setting their eyes on — especially those relocating their manufacturing sites. Besides natural resources, Vietnam has an extensive seaport system with deep-water ports that are excellent for imports and exports.
Another reason behind the rise of public affairs in Vietnam is an acceleration in the need for updated legal frameworks.
In the US, spending on lobbying in 2021 was about 6 percent higher than in 2020, according to data on Opensecrets.org, reaching a total value of $3.77 billion. Pharmaceutical/healthcare and tech companies are among the top spenders, and they’re doing the same in Vietnam and other Asian markets, where there are many opportunities for development. However, laws and regulations in Vietnam are often not up to speed with fast-moving industries. For example, the Personal Data Protection Decree is still not finalized, despite being discussed and drafted in 2019. Many businesses, including tech companies, are awaiting the final version.
Once on the ground, investors find that, in contrast to their Western counterparts, Vietnamese regulators generally function behind closed doors. Every investor prefers a transparent and favorable environment, but cultural differences make it challenging for them and the government to be on the same page.
According to Google search volume, people surveyed in ASEAN countries have shown increasing interest in public affairs agencies across the last four years. Among those, Vietnam had the most prominent search volume (55,710 for the period) and the highest search growth last year (30%).
With more companies entering Vietnam’s market and accelerating innovations demanding legal frameworks, companies need a reliable yet agile consultancy to navigate cooperation with government agencies.
To learn more about the business landscape in Vietnam and meet our public affairs practice, contact publicaffairsvn@vero-asean.com.