FDI paints a mixed picture amid economic uncertainties

December 26, 2011 | 08:24

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Foreign direct investment in Vietnam is painting a black and white picture.

Quality FDI is delivering results where overblown proposals fell short

Foreign-invested projects disburse an estimated $11 billion in 2011, the same to last year’s level, according to a Ministry of Planning and Investment (MPI) report released last week. Foreign investors fork out around $8 billion to Vietnam with the rest coming from Vietnamese partners.

“Many people are worried about the decline of foreign direct investment (FDI), but the figures show a positive outlook,” said Do Nhat Hoang, director of the MPI’s Foreign Investment Agency.

Nguyen Van Tu, deputy director of Hanoi’s Department of Planning and Investment, said the steady FDI disbursement in 2011 indicated investors were still confident about Vietnam, despite global and local economic uncertainties.

He underlined the important role of disbursed FDI, saying without it Hanoi’s export turnover “would have been only half of what it was this year”.

Hoang acknowledged that FDI commitment had seen the real falls, reaching only $12.69 billion in the first 11 months of this year, representing a 26 per cent decline year-on-year. However, he said the drop in new commitment did not neccessarily show Vietnam was falling behind regional competitors.

“Beside the negative impact of global economic uncertainty, the key reason for a decline in FDI commitment is our caution in appraising projects before granting investment certificates,” said Hoang.

Hoang said the past two years had seen a shift in authorities’ FDI assessing approach, fromquantity to quality, and that helped explain the sharp decline in new FDI commitments. “We don’t grant investment certificates to projects carelessly,” he said.

By Ngoc Linh

vir.com.vn

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