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The Evolving Investment Climate in Vietnam and Subsequent Challenges to Foreign Investors

Vietnam's evolving reform process is gaining momentum. Vietnam's Communist Party, however, continues to maintain strong control over economic affairs. Foreign companies with commercial expectations typically are forced into partnership with State instruments responsible for implementation of economic policy. Conflict is inevitable and many difficulties between the partners can be traced to fundamental differences in motivation between foreign investors and Vietnamese authorities. The authors analyze official policy statements and historical trends, examine some Joint Ventures to provide insights into the nature and source of these conflicts, and conclude with a discussion and implications for managers and foreign investors.