Medium- and long-term prospects remain strong
Singapore-based Ascendas, the co-sponsor of The Economist-hosted Business Roundtable with the Vietnamese Government last week in Hanoi, specializes in selling prepared industrial land to locators and offering solutions for businesses. The Saigon Times Daily talks with Ong Beng Kheong, Ascendas chief executive officer (CEO) in Southeast Asia, over the outlook of the Vietnamese economy. Excerpts:
The Saigon Times Daily: What do you comment on some conflicting arguments raised at the roundtable this year? For example, Justin Wood of 
Economic Intelligence Unit (EIU) said Vietnam’s economic growth in 2009 can only be 0.3% while others gave more optimistic figures. Are you optimistic or pessimistic about Vietnam’s economy in the short run?
- Ong Beng Kheong: This is a very difficult time to be doing the economic forecasting. The situation is still evolving and we continue to see more bad news being unveiled. However, in the last two months, there has also been some positive signals. For example, Gallup’s U.S. Consumer Mood Index in the U.S. has shown a significant improvement in the last few weeks. It is therefore not surprising for economists to hold very differing views. A lot will depend on the effectiveness of the stimulus package introduced by numerous governments worldwide, including Vietnam. In particular, it will depend on the effectiveness of the Obama stimulus package. There will be no question of a slowing down in Vietnam’s economic growth in 2009 but we believe that Vietnam will still do relatively well compared to its ASEAN partners, most of whom are expected to be in recession.
Poor transportation infrastructure is a long-lasting concern for foreign investors. What is your view?
- As a representative from International Finance Corporation (IFC) said during the conference, there has been a significant improvement in the road infrastructure in Vietnam over the years. But we feel more needs to be done to improve the infrastructure of the country if Vietnam wants to continue to grow at the pace over the last couple of years. We are seeing some serious bottlenecks and if these are not resolved, it will affect the ability to attract more investments.
The conference discussed the development and renovation plan for the value chain so as to improve the competitiveness of Vietnam’s industrial sector. What do you think?
- We share the same observation. What we are doing to improve the value chain is to position our development, the Ascendas Protrade Singapore Tech Park (APSTP) in Binh Duong province (a joint venture between Ascendas and the local company Protrade), by developing industry clusters. APSTP is focused on developing industry clusters for the electronics sector, pharmaceutical sector and precision engineering sector.
This is your first year of full operation in Vietnam, so since the beginning of 2009, how has Ascendas been affected in the market?
- APSTP is still not ready for full-scale marketing. We have started earthwork and are preparing for the tender of the main infrastructure works. What we have done to date is to create awareness for the project. There is no doubt that the current global economic crisis has had a negative impact. Our customers are telling us that their plans for a new plant or the plan for expansion are being put on hold. However, they are also telling us that they continue to pursue the China plus One policy.
We firmly believe that Vietnam stands to be one of the main beneficiaries of this trend. That’s why we continue to be optimistic of the medium- and long-term fundamentals of the Vietnamese economy.
Reported by Thanh Trung