VietNamNet Bridge – Vietnam might not fulfill this year’s FDI attraction target of US$15 billion due to a recent decline.

In the meantime, its neighboring countries like Myanmar, the Philippines, and Indonesia has boasted a sharp increase in the attraction of FDI capital.

Korean Chamber of Commerce and Industry President Kim Jung In said over the past five years, FDI inflows have shown no signs of bouncing back.

Euro Cham Executive Director Paul Jewell warned that European businesses are seeking other destinations for investment aside from Vietnam.

Hope against hope

Minister of Planning and Investment Bui Quang Vinh said Vietnam is lagging behind Thailand, Indonesia, and Malaysia in terms of FDI attraction since its investment environment remains with little change for the better.

Poor infrastructure and cumbersome formalities are critical factors behind slow inflows of FDI, not relevant to the context of global economic slowdown.

According to the United Nations Conference on Trade and Development (UNCTAD), global inflows of FDI are forecast to increase from US$1.5 trillion in 2011 to nearly US$1.6 trillion in 2012. But Vietnam has seen a sharp decline compared to a year earlier.

Deputy Minister of Planning and Investment Dang Huy Dong said the Vietnamese Government will do its best to meet investor recommendations and demands. There is still high hope that foreign investors will continue to focus on processing and manufacturing industries in Vietnam as these two sectors have attracted more than US$8.5 billion or 69.8 percent of total FDI inflows over the past eleven months.

In addition, capital disbursement by far is almost at the same level of last year.

Dang Xuan Quang, Deputy Head of the Foreign Investment Agency said the government has prioritized improving quality over quantity, even at crunch time. So, a slight decrease in capital disbursement does not matter much.

Upswing in local economy

Many localities are taking the lead in attracting foreign investment. HCM City claims to have thousands of officially licensed projects capitalized at dozens of billions of US dollars in total.

Le Hoang Quan, Chairman of the Municipal People’s Committee, has just unveiled a long-term strategy for attracting and using foreign investment to best advantage. He said the city will focus on training human resources, skilled workers in particular, for its potential while trying its best to push through administrative reform with a view to protecting investors’ legal rights and preventing corruption.

Another case in point is Vinh Phuc Province which has attracted plenty of foreign investment in upgrading technical infrastructure and training human resources. As the Chairman of the provincial People’s Committee put it, the creation of a competitive business environment is the key to successful FDI attraction.

Source: VOV online