Mr. Kyle Kelhofer (Photo: IFC)
Mr. Kyle Kelhofer, the International Finance Corporation (IFC)'s Country Manager for Vietnam, Cambodia and Laos, shares his thoughts with VET on the country's private sector and the support the IFC is providing.
by Linh San
- PM: Government will facilitate private sector
Based on the IFC’s investments in Vietnam, how would you view the performance of the country’s private sector over recent years?
Vietnam’s private sector is growing fast and the speed of the growth is consistent with the sharing of the prosperity and everybody living better.
Vietnam has had a successful run since it introduced the “doi moi” reforms in 1986, which officially welcomed the private sector. I think what is unique is that when I came here 18 years ago the conversation was always about foreign companies and State-owned enterprises (SOEs), and then there would be talk about Vietnam’s small and medium-sized enterprises (SMEs). SMEs have now grown up. The conversation is now about foreign companies and local corporates and only perhaps SOEs. Local corporates have carved out a role for themselves having grown from SMEs 20 years ago.
What obstacles are there in developing the private sector?
Access to land, finance and business opportunities count among the challenges. The answer to whether it is now easier for the private sector to grow compared to 32 years ago is both “yes” and “no”. On one hand, it is easier because there is now greater awareness about the private sector in Vietnam and there are more opportunities to grow because everybody is now more comfortable and know what to expect, and more people around the world know more about Vietnam. On the other hand, because everybody is doing it, there is much more competition than previously.
How will the IFC assist the country’s private sector?
Last year was a record year for FDI and exports and the exchange rate was stable and interest rates came down. The economy as a whole is doing well and its economic sectors, I would say, are now less risky. In terms of challenges, there is a lot of growth out there that needs to be supported. The IFC mobilized nearly half of a billion dollars of financing to the banking sector over the last fiscal year to help support this growth.
We will continue advising the private sector, including SMEs with strong growth potential. This includes targeting specific aspects such as gender finance - promoting access to finance for female entrepreneurs, which we believe is a priority market around the world and has been well received in Vietnam, as well as financing for SMEs and green finance.
What sectors do you think hold potential for IFC’s investment in the years to come?
The financial sector is the top priority for IFC’s investment in Vietnam this year. We are keen to do more and you can expect some new investments in the financial sector. We would like to invest $800 to $900 million this fiscal year, which could be a record.
Usually when we invest in a sector we are positive about its outlook. More importantly, we are simply investing more in Vietnam in general, whether it is infrastructure, banking, agriculture, manufacturing, health, or education. We are investing more and we look forward to investing more. We believe in Vietnam’s future.
- private sector