VAFIE Chairman, Prof. Sc.D. Nguyen Mai: Breaking former institutions, forming new ones with control

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Chairman of the Association of Foreign Investment Enterprises (VAFIE), Prof. Sc. D. Nguyen Mai

Although it took effect four years ago, Decree 06/2017/ND-CP on betting on horse racing, dog racing and international football has not come to life yet. So, in your opinion, is it time for us to amend this Decree to "catch up" with reality?

Before commenting on the draft Decree amending Decree 06/ND-CP, I want us to pay attention to the following issues. Despite many efforts in 2020, our country's economic growth will reach less than 3%, only equal to 40% of the growth rate in 2019. The burden of economic growth will shift to 2021 and the following years.

The National Assembly has just passed a forecast of economic growth in 2021 of 6%, lower than the average level of four years from 2016 to 2019. In the current international and domestic context, it is difficult to accurately forecast the economic growth rate, not to mention the whole period of 2021 - 2025.

Therefore, there are many scenarios associated with possible changes in the short and medium term, in which there are two main factors, which are the control of the Covid-19 pandemic and the ability and time to recover the industries and fields which are most negatively affected by the Covid-19 pandemic, such as tourism, aviation, hotels, dining and passenger transportation; the impact of digital economic transformation; implementation of new generation FTAs; as well as State apparatus reform in the country.

Currently, domestic and international tourism is one of the industries that is suffering the most. At this time, it may not be necessary to reiterate that situation, but the future of the industry should be discussed in an approach that not only recovers the losses, but must move towards modernity with new products, new and more attractive services to compete with other countries in the region – countries with many initiatives, solutions and preferential policies to attract tourists from other countries.

Large corporations and enterprises are aware that, in the context of the heavy impact of the Covid-19 pandemic, traditional business and management platforms are not able to adapt. Accelerating the digital transformation process will create opportunities to help enterprises recycle products, attract visitors, recover and break through soon. There is a need to focus on developing new tourism products, high-end resorts in favour of healthcare, medical treatment, ecotourism, "night economy", and shopping malls that ensure quality, increases entertainment services, art shows, and various types of food, meeting the new trend to increase the efficiency of stimulus.

The type of entertainment with stakes is also in this trend. According to Vabisgroup's calculations, revenue from betting on dog racing, horse racing, football can reach US$1 billion in the first year and grow 25-30% per year.

It is necessary to amend the Decree, increase the competitiveness of tourism as well as contribute to growth.

Dog racing at Lam Son Stadium - Vung Tau. Photo: ST

In your opinion, what are the biggest problems in amending this Decree?

Obstacles are not a hindrance from the outside, but a hinderance from our own developmental thinking. Minister of Information and Communication Nguyen Manh Hung summarized the characteristics of digital economic development in two ways, that is, doing differently from before and doing differently from others.

Therefore, it is not possible to use laws in the past to apply to the present, especially in the digital economy, we have to try it out. The experiment must break old institutions and form new institutions, but be controlled, monitored, and evaluated after a certain time. Reality has proven we have not kept up with the development trend, typically the confusion in management of emerging technology business models such as Grab and Uber.

Besides, to compete with countries we must create better institutions and have lower costs than them. We have the low cost already. Our institutions are behind other countries but is now becoming an advantage. Obviously, current institutional change is always more difficult than building new institutions. All of these factors are entirely determined by ourselves.

There is an opinion that for the licensing of betting, budget only collecting a small amount of tax, profits mostly flow into investor pockets. The benefits that the Government receives compared to the costs, the social damage is not worth supporting. What is your opinion on this matter?

Nothing is perfect. The story of the economy in general and the market economy in particular shows that everything has its downsides. If you just look at the negative side, you will not dare to do anything. That's why I said we had to try it, as well as have time to follow up and summarize. When the good side is seen more than the bad, the institution should be promulgated and amended to promote the wrong side. The wrong side is limited by strengthening the state management, especially timely responses with legal conflicts.

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So, in your opinion, should we limit foreign investors in bidding to choose investors?

This is completely unnecessary. Look at the wealth of Singapore – 75% is brought in by foreign countries. Of course, we have other features that cannot be matched with Singapore's development model. However, we also have our own advantages. Therefore, if there is a mindset of fear of competition, fear of failure, it is difficult to succeed.

Thank you, Sir!