Vietnam has attracted some 26,600 foreign direct investment (FDI) projects with total registered capital of US$334 billion over the past 30 years. Of the total pledged capital, US$184 billion has been disbursed.

Since the launch of the Law on Foreign Investment in September 1987, the FDI sector has seen dynamic growth. The capital has been injected into multiple sectors, promoting economic development and restructuring.

According to economic experts and State officials, foreign investors have helped develop major economic sectors in the country, such as telecoms, oil and gas, electronics, steel, automobiles, motorcycles, information technology, footwear, textiles and garments and food processing, thus assisting Vietnam in increasing its production and export capacity.

FDI enterprises currently account for a quarter of the country’s total investments and over 70% of its export revenue.

According to the Ministry of Planning and Investment, FDI firms have also created some 3.7 million direct jobs and millions of indirect jobs for local workers. Laborers have accessed the most advanced technologies in the world.

FDI attraction has also helped Vietnam deeply integrate with the global economy, strengthening the country’s role and position and improving mechanisms to boost its competitiveness.

FDI enterprises have made up half of the nation’s industrial production value. The rate is 70%-80% in provinces that attract the most FDI capital, such as Bac Ninh, Dong Nai, Binh Duong and Thai Nguyen.

However, numerous shortcomings have been exposed in the process of attracting foreign direct investment into the country. For instance, technology transfers for domestic businesses are not as efficient as expected, and some outdated technologies have negatively affected the natural environment and the country’s economic growth.

In addition, the proportion of Vietnamese products in global value chains remains small. Some FDI enterprises have penetrated the Vietnamese market to make use of the low-cost workforce and the Government’s incentives to complete their products for export, while management agencies have yet to work out effective solutions to increase the added value of Vietnamese products.

Some foreign-invested firms have even been found with irregularities such as trade fraud and environmental pollution.

Phan Huu Thang, former director of the Foreign Investment Agency under the Ministry of Planning and Investment, noted that the country should look into both the opportunities and challenges of foreign investment and use the money wisely.

In general, Vietnam has succeeded in attracting FDI to combat poverty and boost socioeconomic development, Thang added.

In the coming period, the Fourth Industrial Revolution will have a strong impact on the local economy. However, the quality of the manpower and infrastructure in Vietnam are insufficient for the country to benefit extensively from the revolution.

Thang also proposed making use of the capital, technologies and governance modes of foreign firms.

Vietnam needs to improve its policies and increase its competitiveness to attract more high-quality FDI projects that match the country’s socioeconomic development strategies and advancements in science and technology. It is necessary to determine which sectors should be prioritized for FDI attraction, Thang continued.

At first, the country should woo multinational corporations to inject capital into hi-tech manufacturing, agriculture, information technology and service projects, he added. These projects should be environmentally friendly and should involve the participation of domestic enterprises.

Minister of Planning and Investment Nguyen Chi Dung, at a recent seminar on Vietnam’s FDI attraction held by Vietnam Television, stated that Vietnam is an ideal destination for foreign investors seeking to do long-term business. However, the country must review 30 years of FDI attraction to evaluate the efficiency of its FDI-attraction policies and issue further preferential policies.

The country will prioritize hi-tech projects that are environmentally friendly, create high added-value products, have a high localization rate and involve local enterprises, Dung added.

Conference to review 30 years of FDI attraction

The Ministry of Planning and Investment will organize a conference to review Vietnam's FDI attraction over the last 30 years in Hanoi on October 4, the ministry said on its website.

Prime Minister Nguyen Xuan Phuc will attend and give a keynote address at the conference.

The event is expected to attract more than 2,500 attendees, who are leaders of ministries, agencies and localities; representatives of diplomatic agencies, business associations, business support agencies, international organizations, local and foreign enterprises, investment funds, banks and investment consulting companies; and economic experts.

As planned, the conference will feature rounds of discussion on investment in Vietnam, the challenges and opportunities ushered in by international integration and FDI attraction amid the Fourth Industrial Revolution.

The conference will also include seminars to enhance links between FDI firms and domestic enterprises operating in the mechanical engineering, construction, real estate, renewable energy, infrastructure, logistics, tourism, information technology, agriculture, food processing, finance and banking sectors.

On the sidelines of the conference, leaders of the Government, ministries, agencies and localities will meet with representatives of international organizations and associations as well as investors.

Within the framework of the event, the achievements of Vietnam’s FDI attraction over the last 30 yeas will be displayed at some 100 booths.

 SGT