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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