VietNamNet Bridge – The Japan Bank for International Cooperation’s (JBIC) survey in the 2008 fiscal year reveals that Japanese investors continue to worry about underdeveloped infrastructure in Vietnam, particularly roads, ports and power systems.

Some 78% of Japanese businesses said roads in Vietnam need to be improved while 60% said the power supply and 45% said seaports need to be upgraded.

JBIC’s survey was compiled based on 620 questionnaires collected from Japanese companies overseas. According to the survey, 2008 is the third consecutive year that Vietnam ranks third among countries and regions that have medium-term business potential, after China and India.

Low labour cost is still the main reason why Japanese investors see Vietnam as a country with investment potential. Other elements include market development potential, risk diversification, and abundant human resources.

However, according to Matsuda Noriyasu, chief representative of JBIC in Vietnam, many Japanese investors say labour costs in Vietnam have increased and become a new concern.

Notably, only 48% of Japanese businesses appreciate the “market development potential” of Vietnam, compared to 53.4% last year.

Matsuda Noriyasu said Japanese companies continue to worry about underdeveloped infrastructure in Vietnam, especially roads, ports and power. “This is the most serious matter to Japanese producers,” JBIC’s survey noted.

Some 78% of Japanese businesses said roads in Vietnam need to be improved while 60% said the power supply and 45% said seaports need to be upgraded.

At the Vietnam Enterprise Forum (VEF) on Monday, a report by VEF’s infrastructure working group stated that the need for electricity in Vietnam rises by 17% per year. Vietnam will need from $1-6 billion annually to invest in thermo-power plants to satisfy the demand and the requirement for investment in the power system will be $60 billion by 2028.

The Ministry of Planning and Investment calculates that in the next five years, the need for investment in telecommunications, seaports, airports, roads, railways, and aviation transport will be $139 billion.

Xuan Linh