The upgrade of Vietnam’s stock market status from frontier to emerging market will see more international capital flow into the country and boost economic growth, says Citibank Vietnam.
Lai Minh Thuy, head of trade and treasury solutions at Citibank Vietnam, added that the bank expects the Vietnamese government to soon solve relevant issues to complete the market upgrade.
Thuy was speaking at a dialogue between Prime Minister Pham Minh Chinh and representatives of foreign invested enterprises held in Hanoi Monday.
Citibank supports the government’s approach to sustainable growth, including its zero-emissions target and sustainable financial structure, Thuy said, urging faster progress on carbon pricing and establishment of a carbon market.
She also suggested that the government improve the investment environment by enhancing governance and information disclosure, building transition plans, and developing biodiversity.
She said Citibank will continue cooperating with Vietnamese authorities in attracting financial resources for sustainable development, technological innovation, and energy transition via the Just Energy Transition Partnership (JETP).
Implementing a “low-carbon” economy is crucial for Vietnam to continue attracting foreign investment and become a key part of the global supply chain, she added.
On banking sector reforms and the draft law on credit institutions, Citibank understands that foreign-invested firms in Vietnam need easy-to-access, efficient loans. Therefore, the government and the central bank should consider suggestions from the banking sector to update its legal framework, ensuring efficient banking and long-term investment of the foreign sector, Thuy said.
HCMC as international financial center
As a global bank, Citibank has researched models of international financial centers since 2008 and has consulted for Japan, South Korea and Thailand. For Vietnam, Ho Chi Minh City would be the choice location, given its geographical strength and other comparative advantages, Thuy said.
Key factors for the development of an international financial center are a transparent legal framework in line with international standards, a market with many participants, developed infrastructure for round-the-clock operations along with complementary services, a highly skilled workforce and the promise of high living standards to attract investors and experts, she said.
Citibank is willing to cooperate with the Vietnamese government in solving issues and developing a favorable investment environment, aiming to boost sustainable growth. A key requirement for this is a fair and transparent legal framework which can facilitate innovation and attract investment, she added.