The economy won’t successfully grow if money is only poured into the pockets of a few people, while the majority of people face difficulties and have to live in a polluted environment, experts say.
Vietnam is believed to be one of the best destinations for investors, especially ones considering relocating their production bases out of China. And Vietnam is eager to receive the investment wave.
However, it has been advised to receive investments in a selective way.
Emanuel Pastreich, president of the Asia Institute in Washington, said before receiving the new investment wave, Vietnam needs to find out if the investments can bring long-term benefits.
“If foreign investments fit Vietnam’s development strategies, consider the projects. If not, say ‘no’,” he said.
Nguyen Dinh Cung, a respected economist, also said Vietnam needs to change its viewpoints about attracting FDI.
|Vietnam is believed to be one of the best destinations for investors, especially ones considering relocating their production bases out of China. And Vietnam is eager to receive the investment wave.|
“In the last few decades, many FIEs have been exploiting resources in Vietnam, exploiting a cheap labor force and investment incentives offered by the government of Vietnam, and they even have hampered Vietnamese enterprises,” Cung said, showing the other side of the FDI ‘medal’.
“Vietnam needs to set up specific goals. It needs to understand how to attract capital and what they need from foreign investors,” Cung said. “It’s now the time to attract high-quality capital."
The economist went on to say that Vietnam needs to prepare well in terms of labor force, energy, development programming, infrastructure, administration procedures and land resources in order to be able to attract high-quality investments.
“Vietnam must not sit and wait for high-quality investments to come. If it does, it won’t get the best,” he said.
High-quality FDI includes large-scale investment projects which can bring high value. Meanwhile, small projects cannot bring what Vietnam wants - technology transfer. They bring high risks and cause pollution. Many FIEs in Vietnam have been found owing salaries to workers, insurance premiums and taxes to the State.
According to Pastreich, in the near future, Vietnam can avail itself of the opportunity to attract FDI and develop the economy in the near future. However, the economy won’t successfully grow if the money only goes to the pockets of a few people.
Observers say Southeast Asia, including Vietnam, had big economic potential, but may make a mistake if pursuing an outdated development plan which cannot bring long term benefits. This is the region suffering the most from floods caused by the sea water level rise and climate change.
Attracting FDI but not depending on foreign investors is very important for Vietnam’s economy.
“Independent thinking and the building of an independent and autonomous economy are very important for the Vietnamese people,” he said.
Gaining great achievements in the fight against Covid-19 with membership in many FTAs, Vietnam can attract FDI but it is not the only country competing for projects.
The Foreign Direct Investment (FDI) capital flows over the recent five months of 2020 only decreases compared to the same period last year but rises against the same period of the previous years.