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Banks’ concerns are shared by National Assembly deputies. Ho Chi Minh City deputy Tran Hoang Ngan assumed the best anti-dolarisation remedy was not putting a ban on foreign currency insurance but to raise depositors’ confidence in the dong currency and shift into dong deposits.

Depositors have placed over $10 billion worth foreign currency deposits in the banking system. If the proposed draft law makes them anxious and take back the money, this could unnecessary drive up tension in the banking system, according to Ngan.

According to Finance and Budget Committee chairman Phung Quoc Hien, gold and currencies being insured would be an effective measure to fight dollarisation.

Besides, deputies recommended setting gold and foreign currency deposits’ premium levels lower than that of dong deposits and premium payment to be made in dong currency to ensure payment ability.

Ho Chi Minh City deputy Tran Du Lich said depositing gold and foreign currency at banks could be considered a business which was risk-prone, therefore it should not be insured.

VietinBank chairman Pham Huy Hung said people’s appetite for gold and currencies hoarding could grow once their gold and currencies deposits at banks were insured.

Deputies also voiced the need to raise maximal benefit payment to a depositor from current VND50 million ($2,400) to around VND150-200 million ($7,000-$9,000).

“It is unfair when banks use people’s deposits for trading with rosy profit figures, whereas depositors receive a maximum payment of $2,400 only in case of risk,” said Ho Chi Minh City deputy Truong Thi Anh.

Lawyer: Investment law hinders business, needs to be removed

The currently applied 2005 Investment Law comprises some overlapping, contradictory and confused provisions, which is the combination of the provisions of other laws. Therefore, it needs to be removed, according to Lawyer Cao Ba Khoat, former Member of the Government’s Taskforce in charge of supervising the implementation of the Enterprises Law.

Believing that the Investment Law does not help improve the business environment, but even makes the business climate worse, the lawyer has proposed to remove the Investment Law.

Why do you believe that it would be better to remove the Investment Law?

There are many reasons. I once applauded the 1987 foreign investment law. At that time, people still did not have the right to do business, and such a law was very necessary. In the first 10 years since the law took effect, it helped make a considerable progress for the national economy.

However, the situation got different in 1999-2000, when people were given the right to do business. Meanwhile, the 2005 Investment Law consists of many overlapping, complicated provisions.

Let’s take the provisions about investment incentives as an example. The preferences relating to the land lease can be found in the Land Law already, while tax incentives are stipulated in the Tax Law. Meanwhile, the 2005 Investment Law simply “copies” the relating provisions from other laws.

As such, a question should be raised that what will happen with the Investment Law, if the preferences stipulated in the tax law and land law are amended. Will the investment law need an amendment, then? If the answer is “no”, the Vietnamese laws will be inconsistent, and if the answer is “yes”, then policy makers will have to do a thing which does not have much significance.

Is there any report which points out the overlapping and the lack of transparency of the law?

The team in charge of checking the Investment Law has recently pointed out the 12 unreasonable points of the law.

My understanding is that the investment law is designed just for foreign investors. However, Vietnam has joined the World Trade Organization (WTO), and the discriminatory treatment between domestic and foreign enterprises has no more existed. Therefore, I believe that the investment law does not need to exist. The investment law has completed its mission, and it is now the right time to remove it, so that it cannot put difficulties for enterprises’ operation.

If we remove the investment law, then will we need another law to replace it?

Some experts think that it is necessary to amend the investment law, but I think it would be better to remove the investment law and not to issue any other law to replace. It is simply because all the necessary regulations relating to the investment management can be found in other laws already.

What will happen if the investment law still exists?

The investment law is making the business environment in Vietnam worse. For example, the provision that the investment certificate is also the business registration certificate is putting difficulties for enterprises. In principle, the investment must be carried out after registering business. The regulation has led to the fact that businesses only want to transfer projects, and do not want to transfer businesses.

The investment law now comprises a provision relating to the establishment of the trade unions under the control of investors. The provision is really ridiculous which does not come in line with the Labor Code and other legal documents and causes troubles to business activities.

Have you made any official proposal to competent agencies to remove the investment law?

We have many times mentioned the issue at workshops and we have got the support from experts. However, we have not made any official proposals.

Competent agencies are checking 16 laws, including the investment law, and they will make reports about the results of the checking. I think that the removal needs to be approved by the National Assembly.