Denmark is one of the biggest donors to Vietnam and has actively helped reduce poverty in the country. On the occasion of the 40th anniversary of Vietnam – Denmark diplomatic relations, Vietnam Business Forum reporter Nguyen Mai interviewed H.E. Mr John Nielsen, the Danish Ambassador to Vietnam.
Could you please tell us about Denmark’s major contributions to Vietnam in recent years, especially in 2010?
This year, 2011, is very special since it marks the 40 year anniversary of Danish-Vietnamese diplomatic relations. In 1971 Denmark was among the first countries in the West to recognize the Socialist Republic of Vietnam after the war, and we very quickly started up activities to contribute to Vietnam’s social and economic development. In the past 40 years, Denmark has provided Vietnam with more than US$1 billion in the form of grants for development assistance activities and additional credits for infrastructure projects.
2010 was another positive year of boosting the relationship between our countries with many activities in the fields of business, development and culture.
The trade between our countries is picking up after the financial crisis. More than 120 Danish companies are operating in Vietnam. In 2011, we will make further efforts to strengthen the interests of Danish enterprises in some prioritised areas such as CSR, textile and garment, food safety, water technologies, clean-tech, education, and oil and gas industries.
During 2010 Denmark supported Vietnam with US$65 million in ODA. An important milestone was the initiation of the Justice Partnership Programme (2010-2015) in which we work together with the government towards developing a rights-protecting justice sector in Vietnam.
Climate change is another focus area in our development assistance to Vietnam. We are supporting Vietnam with a US$40 million grant for Climate Change Adaptation and Mitigation.
Denmark has actively been supporting small and medium sized enterprises (SMEs) via the Business To Business Programme (B2B) and the Business Sector Programme Support (BSPS). In December 2010, we signed a new agreement in which Denmark will provide approximately US$23 million to strengthen business sector development in Vietnam during 2011-2013.
Culture is one of our other priorities in development activities. Cultural exchange between the two countries has been strengthened with frequent exhibitions, concerts and joint performances organized with the participation of both Vietnamese and Danish artists.
To mark the 40 year anniversary of diplomatic relations with Vietnam, we will have many different events to celebrate our close ties and the history of our partnership in development, culture and business. Our celebrations will peak in the last week of November with “Danish Days in Vietnam.” We expect a visit to Vietnam by His Royal Highness the Crown Prince, along with a high ranking delegation including Danish ministers and companies. The delegation will be visiting Hanoi and HCMC, the Danish Ambassador to Vietnam said to Vietnam Business Forum Magazine
Could you please provide some more details about the Business Sector Programme Support?
The Business Sector Programme Support (BSPS) comprises three components. The first Component is the Global Competitiveness Facility which will provide matching grants for export initiatives by private companies/non-public organizations positively impacting the development of export-oriented value chains. Beneficiary provinces include Nghe An, Thanh Hoa, Khanh Hoa, Phu Yen, Lam Dong, Dak Lak, An Giang and Can Tho. We expect to support about 40 to 50 projects with an average grant of VND 4 billion per project.
The second component is business sector research, which is implemented by the Central Institute of Economic Management (CIEM) under the Ministry of Planning and Investment. The institute will conduct research and capacity analysis on SMEs in collaboration with the University of Copenhagen, Denmark.
The third component is our cooperation with the Vietnamese Ministry of Labour, Invalids and Social Affairs. We work with them to carry out national programmes for improving working conditions in private enterprises. We strongly believe that improving working conditions is very important, as it will contribute to the sustainable development of the nation through reducing pollution of the work environment, preventing occupational accidents and diseases and by taking care of workers’ health. Corporate Social Responsibility (CSR) is an important aspect of Danish activities under the BSPS and the B2B programmes. From the Danish side we wish to ensure that Danish companies conduct their business in Vietnam in a sustainable and responsible manner while contributing to improving environmental health and safety, HIV/AIDS awareness, a good work environment and sustainable production.
How can Vietnam improve its investment environment and enhance competitiveness?
Since Vietnam joined WTO in 2007, significant progress in improving the business environment has been made. But I think other factors need to be further improved in order for Vietnam to strengthen its competitiveness.
First, it is important that the Government of Vietnam give clear signals about its macroeconomic policies. Such signals could help build confidence and be helpful for businesses investing in Vietnam.
Second, Vietnam has a shortage of skilled workers. Many foreign companies are in need of workers with specific qualifications or knowledge. Therefore, the quality of the education system, at all levels, must be enhanced. Improving the quality of education is in my view the key to the future development of Vietnam.
Third, Vietnam needs to develop and improve infrastructure such as roads, airports, seaports and telecommunications systems. That also includes a sustainable energy system to reduce power cuts.
Fourth, I believe that a well-functioning legal system is crucial for Vietnam if it wants to attract and sustain further investment in the future.
One of the other key concerns is corruption. The Vietnamese Government is well aware of this and has developed a comprehensive anti-corruption policy. However, corruption still remains a challenge if the country wants to attract more foreign investors.
Many investors are interested in Vietnam not only as a sourcing market, but increasingly also as a potential consumer market. If Vietnam could gradually improve the above mentioned issues, then it has good opportunities to attract more investors.
In your opinion what are the strengths of Danish companies which could be beneficial for Vietnamese companies?
Despite being a small country of 5.3 million people, Denmark has several very large companies like AP Moller/Maersk, a world-leading container firm; Carlsberg, one of the four world leading beverage producers; and Lego, one of the world’s most important toy producers. They are all present in Vietnam today. We also have a lot of world class expertise within the area of clean technology and green growth.
Danish companies contribute with high level of skilled and knowledgeable human resources. The Danish company culture of corporate governance is very different from the one in Vietnam. The main value of Danish corporate governance is to consider each individual as an independent entity who is free to create, who can think out of the box and who is not only required to follow strict hierarchical instructions.
Besides, Danish companies always believe that if working environments for employees are improved, productivity and performance will be boosted. Therefore, they seek to improve the working environment for employees, promote gender equality and create a friendlier environment at the working place.
Besides, Danish companies are very efficient. With that efficiency and the strong respect for corporate social responsibility, the companies have been developed very sustainably, even though being in a different scope.
With such strengths and advantages, I believe that Danish companies can provide knowledge, skills, high technology, consultancy and support for the Vietnamese business sector to do business more effectively and contribute to more sustainable and competitive growth in Vietnam.