Socialist Republic of Vietnam

By Nguyen Hanh, Vietnam Investment Review, May 19-25, 2003

THE SARS-related slump is only temporary, business leaders say, as investors are showing no intention of abandoning Vietnam for greener pastures.

The World Health Organisation declared Vietnam SARS-free on April 28, but not before the disease killed five medical workers at the Hanoi French Hospital and infected 63 others.

More than 600 people have died from the disease worldwide.
Hotel occupancy rates in Hanoi have plunged to record lows since the outbreak. This time last year the 411-room Daewoo Hotel was half full but now only 15 per cent of its rooms are occupied.

Some foreign investment projects and business trips by overseas investors to Vietnam have been delayed because of SARS fears, the Ministry of Planning and Investment said last week.

A Taiwanese project to manufacture special steel pipes for use in the oil sector has been delayed and a Japanese investor group seeking opportunities also postponed its trip.

Despite these setbacks, business groups from the region most affected by SARS including Singapore, Hong Kong and Taiwan, say investors still look favourably on Vietnam.

The Hanoi president of the Singapore Business Association, Roger Chng, told Vietnam Investment Review last week that neither the war in Iraq nor the SARS situation would have any special bearing on investment in Vietnam.

“The impact of SARS in China would certainly have a silver lining for the Vietnamese economy as Singaporean companies initially planning to invest in China may consider setting up their manufacturing facilities in Vietnam instead.”

Director at the Taipei Economic and Cultural Office in Hanoi’s economic division Shieh Muh Tarng said while the epidemic had had certain adverse economic impacts, as far as Taiwanese investment in Vietnam was concerned, he saw positive signs, specifically in the textile and garment industry after the recent US-Vietnam textile agreement.

The Hong Kong Trade Development Council said no Hong Kong investors had pulled out of Vietnam because of SARS.

The level of Hong Kong’s investment in Vietnam for the first four months of the year was up 85 per cent compared to 2002, council statistics showed. But the number of projects registered in Vietnam between January and April dropped by 7 per cent.

The council’s country director for Vietnam, Tina Phan, said: “From these figures, we can tell that Hong Kong based companies are still investing in Vietnam. That’s a great sign, especially given the current situation.”
The American Chamber of Commerce (AmCham) Hanoi has said although the SARS outbreak temporarily affected investment plans in the region, 91 per cent of AmCham members in Vietnam planned to expand their business this year.