Danida Support to do business in Vietnam

JPO Workshop 16 June 2004 in Hanoi

Lars Mikkel Johannessen

Development Counsellor

Royal Danish Embassy

Introduction

• Reform process and general support

• The Private Sector Development Programme

• The Business Sector Programme (prep.)

• Public Private Partnership (prep.)

• The Industrilization Fund For Developing Countries

Reform Process

• Equitisation of State Owned Enterprises

• Strategy for Public Administrative Reform

• Capacity development in Central Institute for Economic Management

• TA to State Bank of Vietnam in International Accounting pracitices

• Capacity development to Business Associations in Hanoi and HCMC

General support

• Support to Vietnam Business Forum

• Capacity development to Vietnams Garments Association

• Research cooperation between Vietnamese and Danish business universities.

Private Sector Development Program

The PSD Programme

• Objectives:– Support business-to-business partnerships– Create economic growth– Poverty alleviation

• Disbursements in 2003: $ 4.7 million

Criteria for partnership support

• Development prospects (Danida’s development objectives)

• Open to all sectors of business and industry

• Long-term partnerships

• Commercially viable

Phases of a partnership

Preparation phase

Study visits (by Danish Partner company) Market and feasibility studies

Grants: Max. DKK 250,000

Preparation phase

Study visits (by Danish Partner company) Market and feasibility studies

Grants: Max. DKK 250,000

Start-up phase

Two types of start-up facility:Testing the partnershipTraining and technical assistance

Maximum duration of 1 year

Grants:Max. DKK 500,000

Start-up phase

Two types of start-up facility:Testing the partnershipTraining and technical assistance

Maximum duration of 1 year

Grants:Max. DKK 500,000

Project phase

Business partnerships:Training and technical assistanceTransfer of knowledge and know-howEnvironmental supportExport promotion

Loans: Based on specific assessment

Grants: Max. DKK 3 mill.

Project phase

Business partnerships:Training and technical assistanceTransfer of knowledge and know-howEnvironmental supportExport promotion

Loans: Based on specific assessment

Grants: Max. DKK 3 mill.

Case: Mascot Int. A/SNhu Quynh Garment Co. Ltd.

• Co-operation on production of work wear to the Danish market– Training and technical assistance

in production and marketing

• Located in Hung Yen Province• www.mascot.dk

Case: Kiki Design A/SQuang Vinh Co. Ltd.

• Co-operation on production of ceramics aimed at the Western markets:– Transfer of know-how in manufacturing and

selling pottery

– Training and technical assistance to creation of new designs, organising production, management, marketing and application of IT

• Located in Hanoi• www.kiki.dk

Case: Topas A/SLe The Chinh Private Enterprise

• Co-operation on eco-tourism– Eco-Lodge– Financial and Technical co-

operation– Training in environmental friendly

tourism

• Located in Hanoi and Sapa• www.topas.dk

The Business Sector Program

The Business Sector Programme

• We want to:– Support economic growth through

development of the business sector in Vietnam

• Budget: $ 30 million

• Start late 2004 - five years

Basis for Danida support

• The CPRGS

• Obstacles and barriers for business development

• Other donors in the sector

In business with the CPRGS

• ”The private sector is an integral part of the national economy generating more jobs and making an important contribution to GDP growth”

• ”Vietnam will create a fair and level playing field for all enterprises”

• Small- and medium-sized enterprises (SMEs) must have easy access to government support”

Some business barriers

• Insufficient access to capital and land

• Limited transparency in the legal system

• Poor implementation of reforms

• Corruption and harassment of the private sector

• Limited market knowledge and access

Danida Business Sector Programme content

• Support to the local business environment

• Improved labour standards

• Competitiveness of SMEs

• Improvement of commercial dispute resolution

• Business related research

Main co-operation partners

• Agency for SME-development, Ministry of Labour, Invalids and Social Affairs, Ministry of Justice, National Assembly Committee for Economic and Budgetary Affairs

• Province based: People’s Committees and Councils, Business Associations and Trade Unions

• UNDP, UNIDO, ILO and other donors involved

Public-Private partnership(under preparation)

• Business Linkage Projects between Vietnamese SOE’s and Danish companies: Support to ’due diligence’ assessements in relation to equitisation of SOE’s.

• Public/private investment: Joint investments from Danida and private Danish companies in Vietnam

The Industrialisation Fund for Developing Countries

• IFU offers capital and advice to joint venture enterprises in developing countries

• IFU participates as a partner in the joint ventures through committing equity capital and/or loans through board membership

• Carlsberg, KMC, Sea Saigon Shipping, Orana, Scancom, Vidagis

Stay in businessstay in contact

• Thomas Bo Pederesen – Business counsellor at the RDE, Hanoi

Thanks for your attention