Vietnam’s economic success story attributed to effective FDI attraction

Vietnam has become one of the world’s fastest growing economies since the country first opened up to foreign trade and investment more than three decades ago, 

with GDP last year being 12.5 times higher than in 2001 and growth averaging 7.26 percent from 2001 to 2010.

Vietnam’s economic success story attributed to effective FDI attraction hinh anh 1

Smartphone production at Samsung Electronics Vietnam. 

The country’s success has been largely attributed to the effective attraction and use of FDI, which has helped its economy create large numbers of jobs, boost State budget revenue, foster restructuring, and improve competitiveness.

Minister of Planning and Investment Nguyen Chi Dung said FDI attraction laid the foundation for the development of key industries such as telecommunications, oil and gas, electronics, chemicals, steel, automobiles, information technology, footwear, textiles and garments, and food processing.

It has also played a vital role in boosting productivity and exports, he said, adding that the foreign-invested sector contributes more than 70 percent of Vietnam’s total exports.

The country has so far attracted more than 370 billion USD in FDI, of which 58 percent has been disbursed, since the Law on Foreign Investment took effect in December 1987, paving the way for FDI attraction around the country.

FDI inflows exceeded 38 billion USD in 2019, the highest in 10 years and up 7.2 percent against 2018. FDI disbursement stood at 20.38 billion USD, up 6.7 percent year-on-year and a new record.

Due to COVID-19, FDI in the first eight months of this year stood at 19.54 billion USD, down 13.7 percent year-on-year, a report from the Ministry of Planning and Investment’s Foreign Investment Agency (FIA) revealed.

FDI committed to newly-licensed projects, meanwhile, rose nearly 7 percent to 9.73 billion USD. The FIA attributed the increase in fresh FDI commitments in the period to a liquefied natural gas (LNG) plant project in the Mekong Delta province of Bac Lieu with capital of 4 billion USD, which accounted for 41.1 percent.

Additional capital to the tune of 4.87 billion USD went to 718 existing projects, up 22.2 percent in capital but down 21 percent in project numbers.

According to the FIA, additional investment of 1.38 billion USD to a petrochemical complex in southern Ba Ria-Vung Tau province and 774 million USD to the West Lake urban area project in Hanoi contributed to the higher capital amount added to existing projects.

 

This is acceptable against a backdrop of sharply weakening global investment and economic de-growths in many countries induced by the pandemic, FIA Director Do Nhat Hoang said.

The report showed that, in the first eight months of the year, Singapore retained its position as Vietnam's largest foreign investor, with 6.54 billion USD, followed by the Republic of Korea (2.97 billion USD, or 15.2 percent) and China (1.75 billion USD, or nearly 9 percent).

A new wave of investment has emerged, bringing Vietnam fresh opportunities, Hoang continued, and the country must be fully prepared and have a comprehensive set of measures to translate these opportunities into reality.

Professor Nguyen Mai, Chairman of the Association of Foreign Invested Enterprises (VAFIE), said Vietnam must work even harder to improve its business climate and help enterprises weather the COVID-19 crisis. He also advised the country to accelerate promotional campaigns to attract FDI from internationally-renowned conglomerates, especially those with high-tech and financial strength from the US, the EU, and Japan.

Former FIA Director Phan Huu Thang suggested that, to attract FDI faster, Vietnam could promote foreign investment attraction via its network of diplomatic representative offices overseas. At the same time, the Government should streamline public administrative procedures for major projects and actively support foreign-invested enterprises by removing barriers to the capital disbursement process, he noted.

A working group on promoting foreign investment was founded in June under a decision from the Prime Minister, led by Deputy Prime Minister Phạm Binh Minh.

It will be in charge of advising the Prime Minister on mechanisms, policies, and standards in investment cooperation as well as solutions to capture investment cooperation opportunities. It will act proactively in approaching and negotiating with large and hi-tech corporations for cooperative projects for mutual benefit.

Investment promotion activities will also be carried out to attract quality, large, hi-tech, and innovative projects that could create positive spillover effects and favourable conditions for Vietnamese companies to participate in value chains, increase added value, and improve human resources quality./. VNA

WB expert advises Vietnam to think about FDI role

WB expert advises Vietnam to think about FDI role

A World Bank expert’s advice about attracting FDI deserves consideration, according to Bui Trinh, a respected economist.

Vietnam gov’t to offer extraordinary incentives for high-impact FDI projects

Vietnam gov’t to offer extraordinary incentives for high-impact FDI projects

By fulfiling certain criteria, some foreign investors would receive special treatment, said Minister of Planning and Investment Nguyen Chi Dung.

 
 

Other News

.
17th China-ASEAN Expo & Business and Investment Summit on the horizon
17th China-ASEAN Expo & Business and Investment Summit on the horizon
BUSINESSicon  19/11/2020 

The 17th China-ASEAN Expo and the 17th China-ASEAN Business Investment Summit will be held online between November 27 and 30 in Nanning, Guangxi Province of China.

First-ever Epidemic Prevention and Public Health Exhibition Area in the CAEXPO
First-ever Epidemic Prevention and Public Health Exhibition Area in the CAEXPO
BUSINESSicon  18/11/2020 

The upcoming 17th China-ASEAN Expo will launch its first-ever physical exhibition area for epidemic prevention and public health.

Retailers rush to expand market share
Retailers rush to expand market share
BUSINESSicon  17/11/2020 

The race for domestic retail market share was heating up as local and foreign firms looked to expand their networks, experts said.

Vietnam to see boom in supply of industrial property next year: Savills
Vietnam to see boom in supply of industrial property next year: Savills
BUSINESSicon  17/11/2020 

Vietnam will see strong growth in industrial property next year due to higher demand for industrial parks as business expand production or relocate out of China, according to Savills Vietnam.

Wind power: Ministry wants to extend FIT policy
Wind power: Ministry wants to extend FIT policy
BUSINESSicon  17/11/2020 

Following a proposal by 10 provinces, the Ministry of Investment and Trade (MOIT) wants to extend the deadline for FIT (Feed in Tariff) application because many wind power projects cannot become operational prior to the given date.

Vietnam’s tuna exports soar as EVFTA tariff cuts take effect
Vietnam’s tuna exports soar as EVFTA tariff cuts take effect
BUSINESSicon  17/11/2020 

While many seafood products have seen minus growth because of Covid-19, Vietnam’s tuna has been selling well in the world market.

The wealthy continue to spend big money on cars despite Covid-19
The wealthy continue to spend big money on cars despite Covid-19
BUSINESSicon  18/11/2020 

While Covid-19 has had a big impact on the economy and most people, it has not hurt the rich. They are stil spending big money on luxury car models.

Market rally to go on, corporate earnings in the sight
Market rally to go on, corporate earnings in the sight
BUSINESSicon  16/11/2020 

Vietnam’s benchmark VN-Index climbed to a 10-month high last week and the market rally will keep on going, experts and securities firms forecast.

Banks raise foreign ownership ratio to improve financial strength
Banks raise foreign ownership ratio to improve financial strength
BUSINESSicon  16/11/2020 

Vietnamese banks have been increasing their foreign ownership ratios to attract investment and improve financial strength.

Foreign investors increasingly drawn to VN education sector
Foreign investors increasingly drawn to VN education sector
BUSINESSicon  16/11/2020 

According to the General Statistics Office, foreign investment as of October 20 was US$23.48 billion, equivalent to less than 81 per cent of the figure for the same period last year.

Upward trend persists for M&A in real estate
Upward trend persists for M&A in real estate
BUSINESSicon  16/11/2020 

The recent trend of transferring sub-projects to other developers in large-scale real estate complexes is considered one of the efficient ways to bring many benefits to developers, investors, and buyers.

Vietnam's priority objectives to rise above pandemic tides economy
Vietnam's priority objectives to rise above pandemic tides economy
BUSINESSicon  16/11/2020 

Vietnam is now struggling to instrument the recovery of its economy that has been seriously rocked by the global health crisis. 

Eye-catching deals in a year of disruptions
Eye-catching deals in a year of disruptions
BUSINESSicon  16/11/2020 

Although share contributions and purchases have gone into a relative lull in recent times, there have still been numerous outstanding deals stealing the limelight in the market.

Triple amendments strike sparks in M&A
Triple amendments strike sparks in M&A
BUSINESSicon  17/11/2020 

Mergers and acquisitions in Vietnam are forecast to change from the beginning of next year, when three amended laws will come into effect at the same time.

Airbnb-style practices targeted with tax proposals
Airbnb-style practices targeted with tax proposals
BUSINESSicon  16/11/2020 

Proposals currently being pored over to recognise short-term leasing of apartments as a legal business will put pressure on popular homestay groups such as Airbnb.

Shoppertainment the name of the game for e-commerce sites
Shoppertainment the name of the game for e-commerce sites
BUSINESSicon  16/11/2020 

Ensuring the quality of products bought online has long been tricky, but commercial livestreams, e-consulting and virtual reality on e-commerce sites could change that.

Recovery continues
Recovery continues
BUSINESSicon  15/11/2020 

As opposed to that of supply, the recovery of demand remains weaker, which means that the recovery of growth in the coming time will depend largely upon whether consumers can bolster their purchasing power

Gov’t orders solutions to support rice exporters to EU
Gov’t orders solutions to support rice exporters to EU
BUSINESSicon  15/11/2020 

The Government has directed the Ministry of Industry and Trade to coordinate with other relevant agencies to support local enterprises exporting rice to the European Union (EU) to make the most of EVFTA,

Retail spaces left empty as shops go online
Retail spaces left empty as shops go online
BUSINESSicon  15/11/2020 

Although Vietnam has managed to effectively contain the Covid-19 outbreak, many unsuccessful shops have shut down, as retailers have opted to go online to reduce operation costs, with the trend expected to grow further in the coming time.

International consultant to be chosen for North-South express railway project
International consultant to be chosen for North-South express railway project
BUSINESSicon  16/11/2020 

The State Appraisal Council has approved a plan to choose a consulting firm for the North-South express railway project through an international tender.

 
 
 
Leave your comment on an article

OR QUICK LOGIN