The second half of Alex Larkin’s presentation addressed the opportunities for foreign and domestic investors in the electricity generation sector. He began by saying that the government needs to make some good decisions to facilitate this, specifically when it comes to electrical pricing. Electricity is just too cheap at this point to attract foreign investors to come in and build power plants. They won’t make any money if they’re forced to sell at 5 cents per kilowatt hour.
For 2010, the anticipated demand for power was about 20,000 megawatts – by the time we get to 2025, this is estimated to quadruple to 80,000 megawatts. Alex said this information was provided by the MoIT, the Ministry of Industry and Trade, who might be a bit overly optimistic. These projections are based on the idea that electricity will remain very inexpensive, but if it does, they won’t be able to meet demand because power plants won’t be built.
So there’s no doubt that the demand for electricity in Vietnam will increase dramatically over the coming years. The demand has doubled in the last five or six years – it was 10,000 megawatts in 2005.
Following Mr. Thao’s presentation on the Vietnamese Lawyers Federation and the history of the legal industry in Vietnam, the delegates turned their attention to Alex Larkin, who talked about the legal framework for foreign investment and the establishment of business entities in Vietnam. Alex is a transplant from Washington State, so he had a unique perspective on the opportunities available to foreign investors.
Part 2 of this post will address Alex’s comments on the energy-producing sector as a potential for foreign investment.
Alex began by saying that the government is taking action that attracts and encourages foreign direct investment (FDI) They want to encourage the export of goods and reform the administration procedures in order to reduce bureaucratic inefficiencies.
Vietnam, because of its history, is a very bureaucratic place governmentally. It’s very slow – while you can get anything done, it will always take a long time. So there has been a lot of effort recently to reform these procedures to make things more attractive for investors. One such effort is "e-government" which will allow people to do things online more efficiently.
During the ILN’s 2011 Asia Pacific Regional Meeting in Hanoi, Vietnam, we had a very interesting presentation with Mr. Nguyen Van Thao, the Vice Chairman of the Vietnam Lawyers Federation. He treated the group to a fascinating history of legal practice in Vietnam, and the current state of the legal industry. After a welcome from our chairman, our local host lawyer, Mr. Phan Nguyen Toan, translated the presentation for us.
Mr. Thao is the current and permanent Vice Chairman for the Vietnamese Lawyers Federation, which is the national organization for all practicing Vietnamese lawyers. He began with some information about the establishment of the Vietnamese legal association, and the current status of Vietnamese lawyers.
History of the Legal Field in Vietnam – Pre-1987
Vietnam was a longtime colony of France, since before 1945. At that time, they had two small groups of lawyers – one in Hanoi and one in Ho Chi Minh city. But those lawyers were made up of only French lawyers – there were some members who were Vietnamese and had studied French law, but they were only paralegals or support staff for the French lawyers.