Vietnam aims to become IT powerhouse in 10 years

The Jakarta Post, Viet Nam News/ANN, Hanoi, Wed, 04/27/2011

In the hope of becoming an information and communications technology (ICT) powerhouse within 10 years, Vietnam will continue to create favorable conditions for investors.

Announcing this, Deputy Prime Minister Nguyen Thien Nhan said Vietnam needed international partners to help build infrastructure and organize technology transfer.

Nguyen Trong Duong, director of the ministry of information and communications' information technology department, said the telecommunication infrastructure in Vietnam had been growing at an extraordinary pace.

He said preferential treatment for the industry was reflected through investment law and taxation policies.

"For example, software enterprises are exempt from corporate tax for the first four years after they make a profit," he said. "After that, they will have to pay only half of the required tax for the next nine years."

In addition, material imported for software production is also tax-free.

Duong said that for large-scale investment projects, such as the Intel Corporation's US$1 billion assembly and testing plant in HCM City and Samsung's $1 billion mobile phone manufacturing plant in nothern Bac Ninh Province, further incentives would be granted.

"For example, as the Samsung plant in Vietnam exports a large volume of mobile phones, a special Customs office will be based inside the factory to enable faster clearances.

"Not every area in the sector will receive preferential treatments, only those with high added value," he said.

Nhan said Vietnam would continue the administrative reforms so as to create a more attractive business environment for ICT enterprises.

Duong said top priority would be given to software engineering.

He said the strategic orientation for the emerging software sector was to provide offshore software development involving Vietnamese enterprises developing software as required by foreign clients instead of developing their own software.

"We are realistic enough not to target manufacturing packaged softwares, such as operating systems, which would involves billions in investment," he said.

"If we ever develop packaged software, it would be to provide domestic products at an affordable price to replace international ones rather than compete in the global market."

Duong said some of the hesitation among foreign investors was the poor infrastructure and inadequate workforce.

"To many people's amazement, the telecommunication infrastructure in Vietnam has been growing at an extraordinary pace and now we are confident that the current infrastructure can totally empower Vietnam to catch up with the global trend.

"At the same time, the quality of fresh graduates is getting better and better as long as they have proper time for training, normally from three to six months, before actually getting into work," Duong said.

Nguyen The Dung, from World Bank Vietnam, said Vietnam should mobilize different resources, even Official Development Assistance whose conventional domain were for transportation infrastructure, to boost ICT development in Vietnam.

Dung, who manages a $93 million project funded by the World Bank to help boost IT application in State agencies, said although the project was started in 2006 and expected to end next year, disbursement was slow due to limited capacities.

"This is understandable because Vietnam is still new to this type of project," he said.

Dung said Vietnam should improve its capacity to be able to effectively utilize financial assistance.

The ICT sector in Vietnam achieved $7.4 billion in revenue last year, growing at a rate of 15 to 20 per cent. By 2020, it is expected to contribute 8 to 10 per cent to the GDP.