Vietnam must not sit still and wait for FDI to come. If it does, the best will be skimmed off by other countries, according to Nguyen Dinh Cung, a respected economist.
Cung, who was the director of the Central Institute of Economic Management (CIEM), and is now a member of the Prime Minister’s Economic Advisory Council, said Vietnam needs to take the initiative in looking for FDI that fits its development strategy.
Like other economists, Cung believes that there will be a new foreign investment wave, but warns that if Vietnam sits still and waits, the investment may not head for Vietnam. Some foreign investment projects may still come, but they won’t be high-quality projects.
“It is necessary to take action.Vietnam needs to find investors,” Cung said.
The economist suggested setting up a special task force which, on behalf of the Prime Minister, would meet and negotiate with multi-national economic groups which have the intention to relocate their production bases out of China.
The taskforce would have meetings with investors to provide information about Vietnam and show them opportunities they can expect if they come to Vietnam.
|The solution would allow Vietnam to understand how groups are performing and what they need, and allow Vietnam to find out what it should do to attract foreign investors and what it needs from investors.|
The solution would allow Vietnam to understand how groups are performing and what they need, and allow Vietnam to find out what it should do to attract foreign investors and what it needs from investors.
The economist also said that now is the right time for Vietnam to change the view about attracting FDI into Vietnam. Existing foreign investors in Vietnam have shown many problems over the years: they have focused on exploiting domestic resources, taken full advantage of the cheap labor force, and exploited the preferences offered by Vietnam. In many cases, they have blocked and hindered the development of Vietnam’s businesses.
Vietnam needs to be more selective in attracting FDI. It needs to say ‘no’ to labor-intensive and polluting investment projects and prioritize high-quality FDI, especially projects with high technology content. In order to do this, it is necessary to simplify administrative procedures and improve the business environment.
Do Nhat Hoang, director of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment (MPI), said the agency is collecting and analyzing
information about the investment relocation movements in many countries, not only China. He believes this will bring opportunities to many countries.
“We have accessed associations of businesses and large investors to discuss the incentive packages we may offer to them within the legal framework,” he said.
While other countries are setting up specific and clear priorities to attract FDI projects, Vietnam is still pursuing a strategy with multiple targets that could lead to missed opportunities.
Prof Nguyen Mai, an expert on FDI, and chair of the Vietnam Association of Foreign Invested Enterprises (VAFIE), pointed out three problems in the picture of FDI in Vietnam.