ON ENTREPRENOMICS

The term combines “Entrepreneur” and “Economics”, but the intent is more than the sum of each part.

Many perceived issues of the day have largely economic underpinnings, an example that illustrates Adam Smith's 19th century theory of Political Economics: there is interplay between government and business, politics and economics. Economics, as a social science influences the lives and livelihood of people, who are constituents of a body politic, whose common interests for the greater good in turn, determine the course of economic policy.

The need to account for economic phenomena, patterns and theories necessitated a shift to quantifiable terms: numbers, mathematics, and quantitative (statistical) analysis; it has evolved it into a science. Which is apt, because as the 20th century Political Economy becomes the 21st's International Economy, the complex landscape is ever more in need of rationalization in quantifiable, universal, terms.

The entrepreneurs on the other hand, are increasingly the change agents of economic development, because of their “back to basics” culture of market sensitivity, real-time risk assessment, flexibility, and innovation. And they do this while trying to keep a decent ROE intact. The two approaches dovetail, creating a predictable environment. And an entrepreneur favors no better environment than a predictable, variable-minimal one.

It is no surprise therefore that developing nations have begun to mimic their developed counterparts in combining the two approaches especially in terms of trade offer sheets, which combine unique proposals based on hard quantitative analysis. The formula seems to be working.

Keeping it Simple: Be kind, Be true to your word

Vietnam's current foreign investment policy illustrates the marriage of the approaches. Using a simple formula of being kind, and being true to their word, she offers the investor a friendly, predictable climate. The results speak for themselves. An emerging Tiger, posting an average GDP growth of 7%, direct foreign investments (DFI) in 2007 reached USD6 Billion.

We are on the right track, but before we pat ourselves on the back for achieving an unprecedented GDP growth of 7.3%, remember that development's road is hard, and it is long: Vietnam's GDP has been achieving this since the 1990's. In the matter of DFIs, which is a vital factor to development, we are less successful. We merited only USD2.9 Billion last year.

Being kind and being true to your word – these Christian, and incidentally entrepreneurial, qualities need to infect our national policy: first internalizing what we learn at mass every Sunday, and then translating it into action – externalizing - especially with regards our investment-minded neighbors. Without of course severely compromising the national interest, which is different from the relaxation of certain requirements, in the search for sustained investment and growth. These are not governments, but private corporations seeking win-win solutions; sovereign issues are generally not at risk. And what works for them, ultimately redounds to our medium and long term benefits: job creation, infrastructure, technology transfer, and a recurring inflow of capital.

We must align our interests, determining which concessions can be exchanged for benefits that promote the national interest best.

Read closely: I say 'we' because the national interest is a Nation-al Interest: the responsibility of all, not just, as what we have become a national custom, pointing fingers; at anyone but ourselves, and invariably to the top. Realizing that, we must therefore align our interests with what is best for the country: the national interest affects us all, just as all of us affect the national interest.

The fact is our investment policy is in conflict with itself, presenting on the one hand, a climate that is ideal, with our English-speaking, skilled labor force, on the other, an unstable climate, manipulated by an empowered few who want to maintain monopolistic control over their interests.

Our politics continue to unnerve foreign investors who have seriously considered pouring billions of dollars into the country, only to pull out as former politicians or senior government citizens, in an effort to self-aggrandize, utilize their machinery to create or blow issues out of proportion.

And when we suspend foreign projects mid-stream, instead of seeking proactive solutions to non – compliance issues, we aren't honoring our word either. In our haste to assess the violator punitive damages for bureaucratic lapses and transgressions, we lose sight of the project's total value, and its allied benefits.

To illustrate, Intel Corporation facilities are coming online in Vietnam in 2009, and as part of the infrastructure requirement for the giant, dedicated power plants were built to supplement Ho Chi Minh City's antiquated power grid. In return, Intel pays zero corporate taxes for the first four years, followed by a nine year 50% tax break, and thereafter, a 10% corporate tax rate, less than half of the regular 28%1.

The kicker: these perks are open to all investors in Ho Chi Minh City's High-Tech Park. To achieve this must necessarily mean that all sectors involved have come to an agreement, an expression of an entirely entrepreneurial spirit.

The benefits are obvious, and obviously one-sided: in return for tax revenue hit, the country gets a USD1 Billion investment, the creation of 4,000 jobs, a demand for technical skills, infrastructure, informations technology assimilation, and more.

We can emulate these policies, in order to entice investments, and provide development for the larger picture. If we can develop a climate that successfully entices three USD 1Billion projects, we would have matched 2007's estimated DFI influx. Vietnam's investment environment is so friendly that companies with a “China plus one” strategy (a contingency in case things in China become unstable) often make her the “plus one.”

Again, this is something we can achieve, beginning with ensuring that our labor wages remain competitive not just with the region, but with China.

In a five – day visit to Hanoi in 1996 with some Filipino & American businessmen, I never observed, at any time of the day, shirtless, able, young men playing basketball, drinking, or sitting idly by. I did observe once, in a restaurant, a small gathering, and they seemed to be talking of business. That perhaps is indicative of the national character: forged in warfare and spartan living, it tells of determination, perseverance, and ingenuity.

That, perhaps is something we also need to emulate.

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1 USA Today, 11/18/2006, Intel to invest $1 billion in Vietnam as country strives to raise high-tech profile