VietNamNet Bridge - Domestic businesses, mostly State-owned companies investing billions of USD to abroad be not one bright spot even faces many risks on the current landscape when domestic capital investment is still limited, foreign currency is scarce and payment balance deficit is still existing, said the Ministry of Planning and Investment (MPI).

Investment activities of Vietnamese businesses in foreign countries have steadily increased since 2006.

According to the ministry’s report, investment activities of Vietnamese businesses in foreign countries have steadily increased since 2006.

In 2006, total investment capital in overseas markets by Vietnamese businesses remained near $353.5 million. This figure climbed to $979 million in 2007 and $3.3 billion in 2008. The registered figure for 2009 was $2.4 billion. However, this is not an official figure and the actual amount may be much higher.

After five years, Vietnam had 410 foreign invested projects with a total investment capital of over $7 billion, an increase of 3.1 times in projects and 5.3 times in capital.

The average cost of each project is over $17 million, higher than many times compared to previous years.

Laos and Cambodia are the two largest destinations for Vietnamese businesses. 178 projects with $3.2 billion in Laos and 81 projects with $1.3 billion in Cambodia have received funding from Vietnamese businesses.

Vietnamese businesses also registered to invest to developed countries such as Japan, the US, Korea, Singapore and Australia.

PetroVietnam is currently the entity carrying the largest investments in foreign markets with 25 projects in 17 countries as of October, 2010.

The ministry warns that large-scale investment to foreign countries means a huge capital flow to abroad, which will influence to domestic invested projects as well as payment balance in Vietnam.

In addition, foreign invested projects’ profit percentage and effective investment are not high.

With 300 foreign invested projects, the accumulated profit came back to Vietnam just achieved $39 million so far.

Meanwhile, as of September, 2010, Vietnamese businesses disbursed nearly $1.8 billion.

All foreign invested projects invested by PetroVietnam, Viettel, Song Da, TKV and Rubber Industry groups have not yet created profit. They invested more than $1.24 billion to foreign countries.

In gas and oil sector, $900 million was invested to foreign countries, hold 49 percent of a total capital which was sent to foreign countries.

PetroVietnam had to halt six foreign invested projects which did not operate effective and make profit.

Investment capital pour six projects is $10.6 million.

According to the ministry, legal lobby to manage the capital line is still limited because the projects that are to be carried out are in foreign countries.

The ministry has asked the investors of 516 foreign projects how far they have got with implementing the project. As of today, 218 projects have not been reported. Most investors did not report about their profits and did not use this money to be return home.

Source: SGGP