The Law Society speaks with Ambassador Giles Lever about the contribution legal services have made to Vietnam’s rapid growth and the growing opportunities for English and Welsh firms.
Vietnam has become one of Southeast Asia’s major economic success stories over the last few decades, with GDP growth regularly exceeding six per cent a year. As a nominally communist state that has rapidly risen from poverty to lower middle income status, Vietnam’s move from a highly managed system towards a more free market model lends itself to comparisons with its northern neighbour China.
However, whereas China has in many ways become more difficult for foreign companies and investors to navigate, Vietnam has pressed ahead with reforms, strengthened investor protections and begun to curb the excesses of bloated state owned enterprises in earnest. In this radically changing market there are growing opportunities for English and Welsh legal services.
Vietnam’s innitial move towards a “socialist-oriented market economy” occured in 1986 when reforms, often referred to by their Vietnamese name Đổi Mới, or “renovation”, were introduced. Reform has gathered even greater pace since Vietnam’s accession to the World Trade Organisation in 2007. Vietnam has being gradually opening business sectors up to foreign investment, with cities like Danang developing as a significant high-tech centre and Ho Chi Minh developing various industrial parks. These shifts have led to foreign firms contributing to around two thirds of Vietnam’s exports, a similar situation to China in the 2000s.
While there are still restrictions on foreign investment in financial services, telecoms, mining and utilities, there is an expectation of liberalisation in these areas in the coming years. Furthermore, government spending on education is creating a young workforce with better education than most comparable middle income countries.
The Law Society asked Giles Lever, the British ambassador to Vietnam, what his thoughts were on the role of legal services in Vietnam’s growth. Here are his responses:
How important are legal services to the wider development of a country’s economy?
”Legal services are a key part of the institutional framework required to underpin a healthy market economy. A robust, effective, credible and appropriate legal framework and experienced legal practitioners can help to build investor, business and consumer confidence in a developing market economy. Such a framework can encourage investment, spending and prudent risk taking. Companies need to know what the rules are, and crucially, that those rules will be enforced.
In the case of Vietnam, the shift towards a market economy means there are many new areas of the economy which are developing quickly. But as a result they are not yet clearly regulated by Vietnamese law. This means legal services have a very important role to play in the development of Vietnam’s economy. Lawyers are needed to help clients navigate this uncertainty and determine the right legal positions and solutions to get deals done efficiently and properly.”
What role are foreign lawyers playing in meeting the needs of Vietnamese society and the country’s growth?
“Foreign lawyers often provide advice and consultancy to foreign clients looking to or already investing in Vietnam and act as a bridge between foreign clients and domestic counterparts. We have seen this, for example, in relation to power and mining projects. But it is also the case in many other sectors of the economy.
As a country with a young legal system and developing mixed market economy there is a relative lack of experience in relation to handling non-routine everyday transactions or the interpretation of the regulatory framework. Foreign lawyers can bridge the knowledge and skills gap that exists in Vietnam by applying their international experience of such transactions and providing templates that can be followed by the legal profession in Vietnam.
Foreign lawyers are also in a position to provide a careful assessment of potential legal reforms that takes into account the wider economic implications. Through forums hosted by the Vietnamese Government, lawyers have the opportunity to submit their views on proposed new laws.”
How can lawyers not based in Vietnam play a role and contribute to its development?
“Many offshore lawyers have been involved in projects in Vietnam by teaming up with local lawyers. Foreign lawyers, for example, can share experience of their own domestic law and if time is short they can provide that support on a fly-in/fly-out basis.
Bodies such as bar associations and law societies can contribute by implementing programmes with their opposite numbers in Vietnam to advance the development of the legal system and the rule of law. Past examples include programmes to improve legal education, training practices and to support the development and professionalism of the legal profession.”
What do you see as the most exciting aspects of Vietnam’s development in the next decade?
“First and foremost Vietnam will continue to be an attractive destination for FDI. Moreover, given Vietnam’s commitment to ever greater global economic and political integration, I expect to see accelerated regulatory and institutional reform that will help boost Vietnam’s economic development. At the Communist Party National Congress in January, the new leadership sent a positive signal that it is committed to making the necessary economic reforms to sustain Vietnam’s development. In my view, these also need to include reforms that will strengthen the rule of law and develop more effective and transparent institutions of the kind which underpin successful modern economies – commercial courts, competition authorities and so on. This will be a prerequisite if Vietnam is to achieve its ambitious economic development goals.”
Are there any other related points that you would like to raise regarding Vietnam’s economy and legal services?
“There is a growing demand in Vietnam for foreign legal expertise which means there is a wealth of opportunities for foreign lawyers not least in the infrastructure sector. Vietnam is investing heavily in large-scale infrastructure projects and the UK is keen to support Vietnam develop its infrastructure, using its world leading expertise and experience in air port, rail, and PPP. Over the past years, we have been supporting Vietnam with technical assistance, capacity building, and training with a strong focus on Long Thanh Airport, urban rail development in Hanoi and HCMC and PPP. We hope that legal services will be part of the UK expertise that we share here.”
We would like to thank Ambassador Lever and Dang Huyen at the British Embassy for their contributions to this piece.