VietNamNet Bridge – A new strategy on attracting foreign direct investment (FDI) is being compiled by the Ministry of Planning and Investment (MPI), which has stated that there will be big changes in the way of approaching the source of capital.

MPI has been assigned the task of building up a new strategy on attracting FDI which needs to “create a breakthrough in the number of FDI projects and the investment quality”.

Sustainability should be put on the top priority

The noteworthy thing in the drafting of the new strategy is that instead of compiling a strategy itself, MPI will mobilize strength from different sources in the society, including multi-national groups, scholars, private businesses, and it will consult with domestic and international advisors.

Meanwhile, an advisory council has been set up which gathers leading scientists, both Vietnamese and international, who have practical experiences and deep research works in different fields.

According to Do Nhat Hoang, Director of the Foreign Investment Agency, it is now the right time for Vietnam to set up the requirements which allow it to more thoroughly select foreign investors, thus allowing improving the quality and the sustainability of FDI flow.

“In the first phase of opening the doors to attract FDI, due to the lack of investment capital for many fields and branches, Vietnam encouraged investments into all the fields and at any scales,” Hoang said.

“However, in the new period of development, we need to keep a new way of approaching, so as to draw up the solutions which can harmonize the high growth rate and sustainable development,” he added.

MPI’s experts have pointed out that Vietnam is still lacking a national long term strategy on attracting FDI.

Also according to Hoang, one of the most important goals in attracting FDI is to attract capital and technologies into the fields and the branches where the public-private partnership (PPP) mode has not been implemented yet, and to call investment into the manufacturing sector which can bring high added value to Vietnam.

The experts have also pointed out that it is necessary to analyze the FDI flow tendency of strategic partners and Vietnam’s capability in receiving FDI from the partners.

Basic standards to be renewed

According to Dr Nguyen Duc Thang, an environment expert under MPI, Vietnam has been considered a “paradise for making investment” because it sets up overly low standards on environment protection. Meanwhile, other countries have better “business climate” than Vietnam’s, but they prove to be less “attractive” in Vietnam, because they set very strict environment requirements.

However, the situation must be changed: environment protection and striving to sustainable development will be the compulsory requirements for FDI projects in the time to come.

Thang said that in an economy, where low environment standards are applied, enterprises would be able to cut down the expenses on waste water treatment. This explains why Vietnam seems to be more competitive in attracting investors. However, in the long term, this will cause immeasurable consequences.

Vu Tien Loc, Chair of the Vietnam Chamber of Commerce and Industry VCCI, said that Vietnam’s new strategy to attract FDI needs to target higher quality projects.

According to Loc, the figure that only 13.5 percent of FDI enterprises operate in the fields that bring high added values should be seen as a worrying sign.

Source: TBKTVN