|It is up to Vietnam to make the most of the incoming capital from APEC economies
On November 8, the APEC CEO Summit 2017 was officially opened in the central city of Danang with the participation of more than 800 CEOs from leading groups in the Asia-Pacific, including Elon Musk–the founder of Tesla Motors, Sheryl Sandberg–CEO of Facebook, Liam Mallon–chairman of ExxonMobil, Mark Konyn–investment director of AIA, and Scott Price–deputy chairman of Global Leverage-Walmart International, as well as the CEOs of DHL, Johnson & Johnson, and FedEx Express, among others.
Many of the above mentioned groups has expressed interest in investing in Vietnam, including ExxonMobil with the $10-billion Blue Whale gas-to-power complex project and Walmart with the ambition to set its foot in the retail market.
Thus, after the APEC 2017 CEO Summit, Vietnam expects to shake hands with more groups from APEC economies and attract more investment capital to numerous sectors, including processing and manufacturing and real estate, as well as new sectors in the framework of the Industry 4.0.
The APEC Year 2017 was seen as a golden opportunity for Vietnam to lure FDI capital from APEC economies, and the past ten months have lived up to expectations. Notably, APEC economics poured $24 billion into Vietnam, making up 85 per cent of the total FDI inflow. The figure is expected to be much higher by the time the APEC 2017 ends.
Vietnam officially joined the APEC in 1998 and during the past 30 years, APEC economies made significant contributions to Vietnam’s development. In particular, Japan, the US, South Korea, Thailand, and Singapore were the first foreign investors pouring investment capital into Vietnam after the economy opened to FDI capital in 1986.
According to statistics released by the Foreign Investment Agency (FIA), as of October 20, 2017, with the exemption of Peru and Papua New Guinea, who have yet to invest in Vietnam, all APEC members poured an accumulated capital of $246.3 billion, equalling 78.6 per cent of the total FDI inflows coming to the country in the nearly 30 years past.
Besides the British Virgin Islands, nine of the ten foreign investors having the largest FDI capital in Vietnam are APEC economies. These particularly include South Korea, Japan, Singapore, China, and the US, among others. All of them are strategic investors to Vietnam with the total investment capital of $237.5 billion, equalling 96.5 per cent of the total FDI capital from APEC economies and 76 per cent of the total FDI capital inflows.
These economies and their projects have made remarkable contributions to the socio-economic development of Vietnam. For example, investments from Samsung (South Korea), Honda (Japan), Sembcorp (Singapore), as well as Microsoft, General Electrics, and Intel from the US are all great success stories that propelled Vietnam along its speedy development.
According to Prof. Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises, FDI in general and FDI from APEC economies in particular play an important role in establishing spearhead economic sectors, including exploiting and refining petrochemicals, automobile manufacturing, cement, iron and steel processing, as well as electronics and food production, among others. These capital inflows have generated momentum for the Vietnamese economy at large.
However, after 30 years of attracting FDI capital, Vietnam should establish a new strategy to optimise the benefits of this capital. Especially, Vietnam should focus on FDI capital from APEC economies because they are world-leading economies with modern technology and professional management capacity. Taking these opportunities will make it easier for Vietnam to join the global value chain.