The Foreign Investment Agency (FIA) under theMinistry of Planning and Investment says local enterprises havetransferred a total of 1.79 billion USD to invest in foreigncountries since 1989, when Vietnam began investing abroad.

But profit repatriated to Vietnam was 39 million USD in the last 21years, a return of just 0.46 percent, the agency estimates.

However, the actual figure may be higher since many investors have notreported their business performance to the authorities, says Bui QuocTrung, FIA deputy director.

In addition, investors oftenreinvest in their projects, and thus profit repatriation is lower thanexpected. He also notes that although Vietnamese firms started investingabroad in 1989, overseas investment only took off in a significant wayin 2006.

Local firms have invested in 410 projects abroad since 2006 with a total registered capital of 7.05 billion USD.

In the 1989-99 period, only 17 projects with a combined capital of 13.6 million USD were licensed.

The Vietnam Oil and Gas Group (PetroVietnam) has so far invested 1.05billion USD abroad and repatriated profits of more than 31 millionUSD.

The low rate of return has raised concerns about the efficiency of overseas investment.

One expert has said although it is true that country has more thanprofit motives when it promotes Vietnamese investment in othercountries, both the Government and the companies should considerfinancial efficiency before starting a project.

Anotherofficial from the Ministry of Finance says local firms should investoverseas only if the investment offers higher profits than at home, ifthe project can provide materials that cannot be found in Vietnam, or ifthere is a supply shortage of those materials in the country.

Otherwise, enterprises should not invest abroad, especially in thecurrent situation when local companies are short of capital.

Trung of FIA says that in the long-term, investment efficiency couldimprove, but some adjustments need to be made in the short term.

There has been an imbalance between cash outflow and inflow fromoverseas projects. With a large amount of capital expected to go out ofVietnam, the capital source for local investment will certainly beaffected and there will be added pressure on national balance ofpayment.

This will affect directly the country'smacroeconomic balance, and therefore, proper measures are necessary toharmonise overseas and local investments, he adds.

According to the Ministry of Planning and Investment, by the end of lastyear, Vietnam had invested in 465 projects worth 7.73 billion USDin more than 50 countries and territories.

Processing and manufacturing industries ranked first with 102 projects worth 429 million USD.

With nearly 170 projects worth 3.16 billion USD, Laos has so farbeen the most attractive destination for Vietnamese investors.

Russia follows with 17 projects totaling 1.71 billion USD./.