FDI keeps the nation smiling

illustration photo

Dang Xuan Quang, deputy director of the Ministry of Planning and Investment’s Foreign Investment Agency (FIA) said the total disbursement at foreign invested projects in Vietnam could be $11 billion in 2012, equally to last year’s level.

“In which, we estimate foreign investors will bring $8 billion into Vietnam and about $3 billion will be contributed by Vietnamese partners,” said Quang.

FIA statistics show that the disbursement capital of foreign invested  projects in Vietnam reached $7.28 billion from January to August this year, slightly down 0.03 per cent from one year earlier.
“This is a very stable level given the context of the committed capital declining,” said Quang.

The FDI commitments trended down since 2008 when reaching only $8.47 billion during the past eight months, dropping 33.9 per cent against the same period last year.

The decline in FDI commitments indicated that foreign investors’ confidence in Vietnam’s outlook was declining given policy and economic obstacles, said Tran Dinh Thien, director of Vietnam Economic Institute.

Quang said the stability of foreign direct investment (FDI) disbursement was an important factor keeping the economy growing this year.

“If foreign invested enterprises were not doing well in our country at this time, the economy would be in a worse stage,” said Quang.

Despite the global economic turmoil, export turnover at foreign-invested enterprises was reported at $45.6 billion during the first eight months of this year, up 34.1 per cent from one year earlier.
Foreign invested enterprises also made over $7 billion of trade surplus at the same time, playing a big role in narrowing Vietnam’s trade deficit chronic disease.

Meanwhile, the FDI disbursement is contributing to stabilising the local currency. “Once we look at the FDI sector, we always see the disbursement. A stable disbursement at this time is good for the economy in general and help strengthen local currency in particular,” said Phan Thi Thanh Binh, director of ANZ Vietnams’ Financial Market Department.

Quang said the FDI disbursement would continue this momentum next year as the government was trying to ease the obstacles to ongoing foreign invested projects.

“We have been implementing many measures to boost the FDI disbursement. Though the measures will take time, we see some positive signs now,” said Quang.