FDI is expected to remain constant in 2012

The Ministry of Planning and Investment (MPI) last week announced the foreign direct investment (FDI) commitment target in 2012 would be $14-$15 billion, while disbursement capital was expected to hit $11 billion, the same as last year.

Nguyen The Phuong, Vice MPI Minister, said these “are not ambitious targets” because many foreign investors still considered Vietnam an attractive destination. He added the government in 2012 would focus on calling investment from transnational companies with advanced technologies and strategic investment partners like Japan,  South Korea and the European Union.

“We will prioritise infrastructure, environmental-friendly, supporting industry and hi-technology projects and the ones which add Vietnam into the global supply chain,” Phuong said.

Foreign investors last year committed to invest in 1,091 projects in Vietnam, capitalised at $11.55 billion, falling 35 per cent year-on-year, according to the MPI. However, expansion was seen at 374 operational projects in the country with total capital of $3.1 billion, up 64 per cent against the same period last year.

Transnational companies including solar panel manufacturer First Solar, mobile phone maker Nokia and Hyundai Motor Corporation announced new investments in Vietnam last year.
Phuong said the government would change strategies for FDI attraction to enhance the
competitiveness of the country by strictly implementing Direction 1617/CT-TTg.

The prime minister’s direction, issued last September, assigned the MPI to work with other ministries and localities to raise the efficiency of FDI attraction in the next decade. Furthermore, the MPI in collaboration with ministries of Industry and Trade, Finance, Construction, and Natural Resources and Environment to make policies for development of supporting industries, tax incentives, trans-pricing prevention and natural resources management. All of those policies must be completed within 2012.

“As we know, ministries and other state authorities are actively implementing the direction of the prime minister. The results will be completed in a short time,” said Phuong. If the country failed to warm the investment climate to attract more FDI projects, the economic growth target would be negatively impacted on, he said.

Last year, foreign-invested companies contributed $3.5 billion to the state budget, increasing 15 per cent year-on-year. Export turnover from foreign-invested companies is estimated at $54.4 billion, accounting for 59 per cent country’s total export turnover and up 39 per cent from one year earlier.