Despite 2013’s economic difficulties, Vietnam attracted more than 21billion USD in registered foreign direct investment (FDI), a 54.5percent increase over 2012. But experts warn the country risks laggingbehind without stronger efforts at reform. Report by radio The Voice ofVietnam.
On a brighter note
TheMinistry of Planning and Investment (MPI) says the final yearly FDIvalue will be much bigger than these initial reports, and the Vung Rooil refinery expansion - worth 1.48 billion USD - is still awaitingapproval.
Approval would push 2013’s total FDI beyond 23 billion USD, easily exceeding the annual 14–15 billion USD target.
Vietnam’s FDI has fallen steadily from 2008’s record high of 71.7billion USD, pushed downwards under the full weight of the globaleconomic crisis.
The sharp increase in 2013’s FDI shows renewed investor trust in Vietnam’s improved investment climate.
Nine projects have been commissioned on a scale unseen in previousyears. They include the Thai Nguyen-based 2 billion USD SamsungElectronics Vietnam (SEV) electronics manufacturing plant, theHaiphong-based 1.5 billion USD LG Electronics Vietnam electronics plant,and the Binh Dinh-based 1 billion USD bus tyre manufacturing andservice plant from the Bus Industrial Centre of Russia.
Yet respected FDI expert Professor Nguyen Mai says disbursed capitalis more important than registered capital. SEV recently broke ground onits Thai Nguyen plant, due to begin operation in February. The 9 billionUSD Nghi Son oil refinery complex got off the ground in October 2013.
SEV disbursed the first 400 million USD of its BacNinh project’s augmented 2.5 billion USD capital. TheBridgestone-invested 1.22 billion USD plant in Haiphong is scheduled tostart operation in April.
FDI businesses earned 88.4billion USD from exports in 2013, making up 67 percent of the nationaltotal. They also enjoyed a trade surplus of 14 billion USD compared todomestic businesses’13.1 billion USD import surplus.
Under reform pressure
Many economists wonder if FDI businesses are outperforming theirdomestic opponents. Vietnam treats all businesses fairly and equally.The crux of the matter is that domestic businesses must exert a greatereffort to increase investment efficiency.
At aninvestment conference in March 2013, MPI Minister Bui Quang Vinh saidVietnam needs FDI businesses because they manufacture products fordomestic use and exports, pay tax, generate jobs, and bringstate-of-the-art technology to the country.
“Weshould not discriminate between domestic and foreign businesses. We needto restructure wholly State-invested businesses to enable more equalcompetition with foreign rivals,” he said.
Vinh saidVietnam needs to make itself more attractive to foreign investors,especially as FDI inflows continue to decline and regional countriesgrapple for the lion’s share.
“We have to dosomething to placate foreign investor concerns regarding perceivedpolicy risks,” he said, admitting some Vietnamese policies areinconsistent and unclear, such as the incentives on offer for investors.
Vinh said Vietnam’s investment environment is“problematic”. Both Thailand and Indonesia lead Vietnam in this race andCambodia and Myanmar are quickly coming up behind. Without intensifiedreform, Vietnam will lose out to its regional opponents, he warned.
In its 2013 global competitiveness index report, the World EconomicForum promoted Vietnam five rankings 70th out of the 148 assessedeconomies. Vietnam had fallen in 2011 and 2012.
InSoutheast Asia, however, Vietnam’s standing remains far belowSingapore’s 2nd, Malaysia’s 24th, Brunei’s 26th, Thailand’s 36th,Indonesia’s 37th, and the Philippines’ 59th.
To secure more sustainable and consistent flows of FDI, Vietnam has no choice but to accelerate reforms.-VNA
On a brighter note
TheMinistry of Planning and Investment (MPI) says the final yearly FDIvalue will be much bigger than these initial reports, and the Vung Rooil refinery expansion - worth 1.48 billion USD - is still awaitingapproval.
Approval would push 2013’s total FDI beyond 23 billion USD, easily exceeding the annual 14–15 billion USD target.
Vietnam’s FDI has fallen steadily from 2008’s record high of 71.7billion USD, pushed downwards under the full weight of the globaleconomic crisis.
The sharp increase in 2013’s FDI shows renewed investor trust in Vietnam’s improved investment climate.
Nine projects have been commissioned on a scale unseen in previousyears. They include the Thai Nguyen-based 2 billion USD SamsungElectronics Vietnam (SEV) electronics manufacturing plant, theHaiphong-based 1.5 billion USD LG Electronics Vietnam electronics plant,and the Binh Dinh-based 1 billion USD bus tyre manufacturing andservice plant from the Bus Industrial Centre of Russia.
Yet respected FDI expert Professor Nguyen Mai says disbursed capitalis more important than registered capital. SEV recently broke ground onits Thai Nguyen plant, due to begin operation in February. The 9 billionUSD Nghi Son oil refinery complex got off the ground in October 2013.
SEV disbursed the first 400 million USD of its BacNinh project’s augmented 2.5 billion USD capital. TheBridgestone-invested 1.22 billion USD plant in Haiphong is scheduled tostart operation in April.
FDI businesses earned 88.4billion USD from exports in 2013, making up 67 percent of the nationaltotal. They also enjoyed a trade surplus of 14 billion USD compared todomestic businesses’13.1 billion USD import surplus.
Under reform pressure
Many economists wonder if FDI businesses are outperforming theirdomestic opponents. Vietnam treats all businesses fairly and equally.The crux of the matter is that domestic businesses must exert a greatereffort to increase investment efficiency.
At aninvestment conference in March 2013, MPI Minister Bui Quang Vinh saidVietnam needs FDI businesses because they manufacture products fordomestic use and exports, pay tax, generate jobs, and bringstate-of-the-art technology to the country.
“Weshould not discriminate between domestic and foreign businesses. We needto restructure wholly State-invested businesses to enable more equalcompetition with foreign rivals,” he said.
Vinh saidVietnam needs to make itself more attractive to foreign investors,especially as FDI inflows continue to decline and regional countriesgrapple for the lion’s share.
“We have to dosomething to placate foreign investor concerns regarding perceivedpolicy risks,” he said, admitting some Vietnamese policies areinconsistent and unclear, such as the incentives on offer for investors.
Vinh said Vietnam’s investment environment is“problematic”. Both Thailand and Indonesia lead Vietnam in this race andCambodia and Myanmar are quickly coming up behind. Without intensifiedreform, Vietnam will lose out to its regional opponents, he warned.
In its 2013 global competitiveness index report, the World EconomicForum promoted Vietnam five rankings 70th out of the 148 assessedeconomies. Vietnam had fallen in 2011 and 2012.
InSoutheast Asia, however, Vietnam’s standing remains far belowSingapore’s 2nd, Malaysia’s 24th, Brunei’s 26th, Thailand’s 36th,Indonesia’s 37th, and the Philippines’ 59th.
To secure more sustainable and consistent flows of FDI, Vietnam has no choice but to accelerate reforms.-VNA
