Business Execs See Red Tape in Vietnam

U.S. Secretary of State Condoleezza Rice, right, holds talks with Russian Foreign Minister Sergey Lavrov on the sideline of the Asia Pacific Economic Cooperation (APEC) summit at a hotel in Hanoi, Vietnam, Sunday, Nov. 19, 2006. (AP Photo) (AP)

HANOI, Vietnam -- Eager to tap Vietnam's burgeoning economy, international business leaders who gathered in Hanoi this weekend heaped praises on the communist nation for its economic reforms and for opening itself up to global trade.

"We see great growth potential in this market," said Michael Ducker, president of FedEx Express International. "We're very optimistic about the future here."

Rival delivery company DHL, a unit of Deutsche Post AG, also is eager to expand its presence in the country, whose economy is growing at a 7.5 percent clip amid surging exports and consumer spending.

"Consumers appear to have more money in their pockets ... so you see not only exports growing, but imports into the country, too," said Peter Landsiedel, chief executive of DHL Global Forwarding Asia Pacific.

Hanoi's role as host of the Asia-Pacific Economic Cooperation summit, bringing together government leaders from 21 countries and territories and 1,200 business executives, is giving Vietnam a rare chance to showcase its transformation from a war-ravaged backwater to a fast-growing exporter.

Vietnam's membership in the World Trade Organization, expected to become official next month, will require the country to slash tariffs and other trade barriers, making it easier for foreign companies to enter the Vietnamese market. It will also give Vietnamese companies new export opportunities and a chance to supply goods and services to foreign corporations coming to Vietnam.

Still, the country faces obstacles that hinder its development and make doing business here difficult, from poor port facilities to myriad regulations, business executives and other experts say.

DHL's Landsiedel says there is too much red tape in customs regulations.

"From our perspective, this has to be made easier, more direct and straightforward," he said in an interview. "The government is aware of that and is working on it."

Toward this end, the United States is working with Vietnam to implement an "eManifest" system at the Hanoi and Ho Chi Minh City airports in which customs officials can receive electronic manifests before airplanes arrive so that they can quickly determine which items need inspection.

Vietnam's still-developing infrastructure is also an obstacle to investors, said Christoph Wiesner, a member of the European Commission's delegation.

"Ports are one major headache. Despite some improvements, it takes too long to ship a container to main overseas destinations and it's quite a bit more expensive than elsewhere in the region," Wiesner said during a panel discussion.