VietNamNet Bridge - The decline of the inflow of foreign direct investment (FDI) in Vietnam in the past four months has worried many people but a series of billion-dollar projects that will come to Vietnam in the near future may help reverse FDI inflows.

The AJU Business Daily newspaper of South Korea reported a few days ago that Samsung Display was considering shifting its LCD factory from Korea to either China or Vietnam.

This decision came after Samsung LCD split LCD and OLED into two separate parts. As LCD assembly still needs unskilled labor, Samsung Display is considering the possibility of transferring these lines abroad to save costs.

It means that China and Vietnam are the two options. However, based on Samsung’s moves recently, it is more likely that Samsung Display will choose Vietnam. Moreover, based on calculations of "cost savings", Vietnam has advantages over China.

Samsung Display last year invested $1 billion in Bac Ninh Province to produce high-resolution screens for its cellphone factories in Vietnam and worldwide. This plant started operating in March 2015 and may expand.

Furthermore, recently the government of Bac Ninh province authorized the Management Board of Bac Ninh Industrial Zone to discuss Samsung Display’s expansion project. If this plan becomes a reality, Samsung Display will pour a lot of money into Vietnam in the coming time.

Meanwhile, last week officials of Binh Dinh Province had two meetings related to the Victory Nhon Hoi Refinery project. Previously, Ho Quoc Dung, chair of Binh Dinh, told Dau Tu Newspaper that the local authorities expected to grant a licence to this $22 billion project in the second quarter this year. If this huge project is licenced, FDI flow into Vietnam will reverse.

In addition, it is rumored that this year the Van Phong Thermal Power Project 1 will come to an end this third quarter, with at least $2 billion of capital.

This March, Eunsan and OUE from South Korea proposed a real estate project in the area of Ba Son Shipyard in HCM City with a total investment of $5 billion and the schedule will launch this September.

However, the fate of this project depends on the decision of the Prime Minister because the land in the project area is managed by the Ministry of Defence.

Indeed, the list of huge FDI projects that are targeting Vietnam includes many other projects, especially BOT (build-operate-transfer) projects in the power industry.

Dang Xuan Quang, Deputy Director of the Foreign Investment Department (Ministry of Planning and Investment), has repeatedly said that the decrease of FDI in the early months of the year was mainly because many huge projects had not been licensed yet.

Meanwhile, FDI disbursement continued a positive trend, with $4.2 billion disbursed in the past four months, up 5% compared to the same period of 2014, according to the Foreign Investment Department.

"In the past four months, only the disbursement of the two projects Formosa and Samsung for imports of machinery and equipment amounted to more than $1 billion," said Tran Tuan Anh, Deputy Minister of Industry and Trade.

A $1.4 billion Samsung project will kick off in HCM City this May.

However, despite the positive trend of registered capital and disbursed FDI, economists said that the important thing was the positive influence of FDI projects on the economy and society of Vietnam, not their scale.

At the recent Spring Economic Forum, Dr. Tran Dinh Thien, head of the Vietnam Institute of Economics, raised many questions about this, for example what would happen if the cycle of taking advantage of Vietnam of foreign investors ends?

"When FDI comes to Vietnam, with leading corporations such as Samsung, Microsoft, and Toyota, Vietnam’s development has changed profoundly. But would that trend change the level of development of Vietnam as as we expect?” he said.

This is still a good question at a time when Vietnam still sees FDI as an important resource of the economy.

Dau Tu