Japanese companies considered Viet Nam one of the world’s top three countries/regions for business potential, according to a survey released by the Japan Bank for International Cooperation (JBIC).

The survey, announced on December 4, ranks countries on their appeal as a destination for investment over the next three years. It was conducted prior to the Consultative Group (CG)’s meeting in Ha Noi.

This is the second time Viet Nam has taken third position in the ranking, coming in after China and India – two emerging economies in Asia .

The survey showed Japanese firms, including production and business companies, have been satisfied with operations in Viet Nam , the president of the Association of Japanese Businesses in Viet Nam , Ken Ozeki, told a Viet Nam News Agency reporter at the business forum opening on the same day.

JBIC pointed to an inexpensive labour force and the growth potential of the market as the top two reasons for Viet Nam ’s business promise.

In addition, risk diversification, excellent human resources, a base for export to a third country and stable political and social conditions are factors that are attractive to Japanese investors.

Ozeki said the large attendance of Japanese entrepreneurs at forums on Viet Nam held during State President Nguyen Minh Triet’s recent visit to Japan proved strong interest in the Vietnamese market, particularly in manufacturing and assembling for exports, and distribution and banking services.

However, the JBIC survey indicated that Viet Nam needs to deal with many issues if it wants to lure more Japanese investment. Under-development of infrastructure topped the list of concerns of Japanese investors, who called for priority in transport and power systems.

Ozeki, who is also General Director of Mitsui Viet Nam , added that Japanese investors still face difficulties in implementing enterprises and investment laws as well as regulations on customs and taxes.

Viet Nam recorded 15 billion USD in foreign direct investment (FDI) in the first 11 months of 2007. Of this, 771.8 million USD came from Japan , making the country the fifth largest foreign investor in Viet Nam . Japan injected 315 million USD into operational projects, the largest volume so far this year.

The CG meeting that will take place in Ha Noi from December 6-7 is seen as a forum for the Vietnamese Government and donors to discuss opportunities and challenges for the country’s development.

At the 2006 event, donors pledged a record 4.44 billion USD to support Viet Nam ’s development and poverty reduction efforts. (VNA).