At a recent forum, Minister of Planning and Investment Nguyen Chi Dung cited the inspiring story of the Cayman Islands in the Caribbean Sea to establish an international financial center as an example for Vietnam’s similar aspiration. It is said that the Cayman territory witnessed capital flows of up to US$ 2 trillion a day after that momentous decision, a dramatic difference to the island’s status 40 years ago with a GDP of zero.
After years of delay, this year, Vietnam will implement a plan to establish an international financial center in the country. The country now has "a once in a lifetime opportunity" to establish an international financial center (IFC) in major cities like Ho Chi Minh City more than ever, thanks to several reasons:
HCMC is only 3 hours away from most countries and territories in ASEAN and Northeast Asia
Vietnam’s time zone does not coincide with any of the 21 existing international financial centers in the world, easy to distinguish the country’s position in the global map of financial centers
According to the municipal People’s Committee, HCMC possesses a dense network of 2,134 banking and credit entities, including 50 foreign-invested, 31 joint-stock commercial, and 4 state-owned banks
Market cap value in the Ho Chi Minh Stock Exchange made up for 95% of the whole domestic market’s total and 54.3% of the country’s GDP
The city is home to 33.8% of the total FDI projects in Vietnam and the epicenter of the Vietnamese stock market
The formation of an international financial center will help Vietnam better at financing supply chains and managing risks. Besides, from this establishment, HCMC authorities can collect considerable service fees, just like what the governors of the Cayman Island did.
It is now or never. Vietnam will lose the opportunity if it waits for another year or does not focus all the resources (human, capital, etc.) on materializing the aspiration. The biggest risk is that other international financial centers could be established faster in the same time zone and Vietnam will lose its competitive advantage.
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