Halting FDI slide remains a chief goal

Authorities say new policies should help stop the downward trend in foreign investment in Vietnam

The Ministry of Planning and Investment (MPI) last week announced the target for the nation’s  committed foreign direct investment (FDI) sum this year would be $13-$14 billion, and foresaw the disbursed amount would be in the range of $10.5-$11 billion.

“2013 will continue to be a tough year for FDI attraction.  So we  have just set the targets similar to last year’s,” said Do Nhat Hoang, director of the MPI’s Foreign Investment Agency.

" As the global economy is in downturn, every country needs to attract more and more FDI. The
competition among Asian nations is becoming tougher and tougher. - Bui Quang Vinh
Minister of Planning and Investment "

After joining the World Trade Organization in 2006, Vietnam emerged as one of the most attractive places for FDI in the world. The FDI commitment to Vietnam in 2006 reached $12 billion, $23 million in 2007 and in 2008 it peaked  $71.7 billion. The FDI disbursement also rose and maintained in the range of $11-$12 billion during 2007-2011.

However, the FDI commitment has begun dropping since 2009 and reached only $13.1 billion last year, while the disbursement in 2012 also declined 4.9 per cent year on year to $10.5 billion.

MPI Minister Bui Quang Vinh said FDI attraction would be more difficult as Vietnam faced growing competition from neighbouring Asian countries.

“As the global economy is in  downturn, every country needs to attract more and more FDI. The competition among Asian nations is becoming tougher and tougher. In this context, our investment policies have not been promptly changed to enhance the nation’s competitiveness,” said Vinh, citing this as a major factor behind the FDI inflows decline in Vietnam.

To meet 2013’s set targets, Vinh said the MPI was completing a draft resolution outlining specific measures to improve investment climate, that could be submitted to the Vietnamese government for approval  this month.

In a similar move, Prime Minister Nguyen Tan Dung last month asked  the MPI to timely submit to the government a draft decree providing the list of areas and industries that should enjoy favourable investment incentives.

Dung also urged the MPI to develop an attractive and competitive incentive policy to attract more FDI, especially big projects from multinational companies.

“There will be lots of changes of investment policies this year. All just aim to attract more investments from foreign investors, especially from multinational companies,” said Vinh, adding that the twin investment and enterprise laws would be  amended this year by the National Assembly to pave the way for FDI inflows in Vietnam.

Last year, Vietnam succeeded in drawing in multinational companies like Korea’s Samsung, which announced to invest additional $830 million in its operating mobile phone manufacturing facility in northern Bac Ninh province, and US’ General Electric, which decided to build an engineering centre in Ho Chi Minh City to focus on product design, applications and services for the oil and gas sector. Coca-Cola, the world’s leading beverage producer, also announced plans to invest additional $300 million in the growing market of Vietnam.