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Viet nam : Number of equitized state owned enterprises, Foreign direct investment from Japan
Plans for broader finance sector reform include the development of the bond market over the medium term as outlined in a government blueprint in February 2013. Policy actions will involve establishing... credit rating agencies, a benchmark yield curve, primary dealer system, and a legal framework to encourage investment in government bonds by voluntary pension funds and insurance companies. The government aims to increase the value of bonds outstanding from 18% of GDP in 2011 to 38% in 2020 and to raise the percentage of bonds held outside banks from 12% to 20% in that period. As for the SOE sector, the government has committed to issuing a road map for reform by mid-2013. Implementation will require interagency coordination as SOE reform cuts across the mandates of several ministries. Restructuring plans have been approved for 24 large SOEs, and more such plans are expected, including equitization or partial privatizations through share offerings if market conditions allow. Equitization has slowed in recent years (Figure 3.31.12). One goal is to divest SOEsí noncore businesses by 2015, as many SOEs have accrued debts by investing in areas unrelated to their core businesses. The absence of an overarching regulatory framework for SOE reform could put at risk the implementation of restructuring plans developed through an ad hoc approach. For example, support for SOE restructuring will be difficult to muster until programs are put in place to support and retrain workers displaced during the shakeup of state firms. Despite these concerns, Viet Nam has remained an attractive investment destination in light of its growing working-age population and low labor costs. This is illustrated by an increase in FDI from Japan (Figure 3.31.13). Nevertheless, the country faces increased competition for FDI in Southeast Asia particularly from Indonesia. Viet Namís ability to remain competitive and drive economic growth back up to 7%Ė8% will depend in large part on the timely and decisive implementation of structural reforms to the banking and SOE sectors and the improvement of other aspects of the business environment. Indicating the extent of this challenge, Viet Namís ranking in the World Economic Forumís Global Competitiveness Index fell by 16 places in the past 2 years to 75th of 144 countries (Table 3.31.2). That puts it below other larger Southeast Asian economies. Viet Nam scored poorly on several index components, including infrastructure (95), business sophistication (100), respect for property rights (113), irregular payments and bribes (118), and soundness of banks (125).Sources: Ministry of Finance; ADB estimates.Japan External Trade Organization; ADB estimates
Rank: 2061 of 4886 in Economy
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