International Financial Center needs cautious approach

Saigon Investment
(SGI) - Ho Chi Minh City authorities are currently consulting experts and investors on the establishment of a Vietnam International Financial Center (IFC) to promote its growth as the economic hub of the country. 

Illustrative photo.

Illustrative photo.

The London based commercial think-tank, Z/Yen Group, has already created the Global Financial Center Index (GFCI) after consultation with experts, such as international investment banks, fund managers and CEOs to determine the major factors for evaluating Vietnam IFC.

Promising future

Speaking at a recent workshop, Mr. Johnathan Hanh Nguyen, Chairman of the Board of Members of Imex Pan Pacific Group (IPPG), gave several pieces of advice on non-traditional measures which may make the dream of Ho Chi Minh City of becoming an IFC come true. The good news is that although his advice has not been made known to the public nor assessed by any organization, Mr. Hanh Nguyen is a successful and experienced businessman and has the confidence of US consultants who have designed highly feasible projects that could help the City become a leading IFC.

Mr. Hanh Nguyen said that international consultants want to make it possible for the Z/Yen Group to rank Vietnam IFC among the world's top 50 by the year 2030 and top 20 by 2045. It is still unclear how this will be possible, but he says that US investors would be willing to bring Disneyland to Ho Chi Minh City with an estimated 25 million visitors per year. Mr. Hanh Nguyen also said that Vietnam IFC would have other features like a casino, a sports betting center and duty-free shops.

Mr. Nguyen provided several detailed ideas that could enable concerned authorities to understand indepth what Vietnam IFC could look like in the future. When people debate the development and competition of Vietnam IFC, there are always potential biases and loopholes that those responsible must be aware of when approaching the conclusions of the Z/Yen Group survey for GFCI, or any opinions from any experts, investors or institutions.

Experts and consultants know that opinions from experts would be used to influence politicians and decision makers. For instance, they may say that extreme legal taxes or even no taxes, or easy rules would be the key factors in developing a successful IFC, even though this may actually not be important in their daily business decisions. They may also say that investing in amusement parks and casinos would help an IFC to make handsome profits, even though they really think that top priority should be given to building world-class schools and hospitals. The national and international talents involved in establishing the IFC must have prioritized world-class academic and health services for themselves and their families, rather than gambling at casinos and racetracks.

Even when consultants and experts sincerely and wholeheartedly want to make significant contributions to the development of the IFC, they do not always accurately identify or acknowledge the real reasons for their actions. For instance, some people who badly need marriage advice often look to experts or watch the popular dating game shows on television that discuss marriage issues. There is a lot of evidence that the behavior of these experts in reality is very different from descriptions in game shows or forums.

Decide with caution

It is certainly vital to seek advice from experts, investors and prestigious international organizations for the establishment of the Vietnam IFC. Yet those in charge must have broader views. In addition to GFCI, many surveys by international organizations could recommend crucial factors in making it a leading IFC. Survey results often overlap and change over time, but by and large, at least for Vietnam IFC, some elements, however far-fetched, must be weighed and considered.

For instance, it is extremely essential to have high-profile financial experts, follow sufficient compliance with the laws, have great respect for appropriate institutions, and adopt reasonable taxes. Other elements include good quality core infrastructure, high-quality support services, low operating costs and a high-degree of liberalization for capital flow in and out of the country. These factors indicate that it is now impractical to think about high-class IFC with tall buildings.

Moreover, it is impossible to depend heavily on casinos or amusement parks for the good of the public. In the case of the recent non-traditional plan suggested by an experienced investor for the development of Vietnam IFC in Ho Chi Minh City, it is crucial to make wise decisions to avoid creating a white elephant that will be difficult to oversee in the long run. Such a situation will only become heavy on costs and liabilities, as it will cost more and more to raise, but hard to dispose or maintain.

Financial experts, investors, luxury business brands will all have diverse approaches to establishing an Vietnam IFC. Nonetheless, by choosing to develop a national IFC, headquartered in Ho Chi Minh City, traps such as reaping benefits only for interest groups must be avoided.

Prof. Tran Ngoc Tho

Các tin, bài viết khác

Đọc nhiều nhất

Illustrative photo.

Vietnam must develop offshore wind power energy

(SGI) - Climate change and greenhouse gas emissions from manufacturing units are making it difficult for Vietnam to meet the millennium goal of ensuring economic development in a sustainable environment.