Foreign investment driven towards new breakthrough phase

Currently, the FDI sector creates over 2 million jobs, while contributing more than 70 per cent of Vietnam's total export turnover, about 50 of its industrial output, and over 20 per cent of its GDP. (Photo: VNA)

Hanoi - Vietnam has so far drawn nearly 500 billion USD in registered FDI capital after nearly four decades of opening up its economy, with investment quality improvement considered a key task for a new breakthrough phase ahead, the Ha Noi Moi newspaper assessed in its recent article.

According to the General Statistics Office, the total FDI in the first quarter of 2024 neared 6.17 billion USD, up 13.4 per cent year-on-year. The first three months also saw 4.63 billion USD worth of FDI disbursed, an annual rise of 7.1 per cent and the highest for the quarter over the past five years.

Currently, the FDI sector creates over 2 million jobs, while contributing more than 70 per cent of Vietnam's total export turnover, about 50 per cent of its industrial output, and over 20 per cent of its GDP. Up to 80 per cent of the foreign enterprises with headquarters or branches in the country have developed ESG (environmental, social, and governance) strategies.

The paper said international investors are now shifting their focus towards high-tech, environmentally friendly sectors, which is conducive to Vietnam's sustainable development goals. Between the fourth quarter of 2023 and now, the Southeast Asian nation has hosted numerous delegations of businesses and investors exploring opportunities in high-tech, clean energy, and circular economy, with plans for semiconductor production having emerged. The Vietnamese government also advocates the swift and effective implementation of programmes to train 50,000 high-quality engineers by 2030, serving all stages of the value chain related to the aforementioned manufacturing sectors.

Recognising FDI importance for economic growth, the Prime Minister issued Decision No. 667/QD-TTg dated June 2, 2022, approving the foreign investment cooperation strategy for 2021-2030. The document highlights the attraction of high value-added foreign-funded projects with advanced technology, modern management, positive spillover effects, and connections to global production and supply chain.

Minister of Information and Communications Nguyen Manh Hung stated that Vietnam is proactively building an ecosystem to support the formation and development of the semiconductor industry, inviting foreign investors to participate. It is also actively working to ensure high-quality human resources meeting the requirements of related projects.

Meanwhile, the National Innovation Centre (NIC) is closely coordinating with many domestic and international technology enterprises such as Viettel, FPT, Intel, and Qualcomm to promote research cooperation, human resources training, talent recruitment, and ecosystem development for semiconductor manufacturing.

In a new initiative, a delegation of 50 leading US companies in key sectors such as energy, aviation, technology, banking, and food recently visited Vietnam to seek partnership and investment opportunities. As a result, important content was exchanged and a memorandum of understanding signed with an initial value of hundreds of millions of USD.

According to the Ministry of Planning and Investment, with its potential and economic geographical position within the global supply chain, Vietnam has a great chance to attract and utilise foreign capital inflows to encourage rapid growth and sustainable development.

Where is environmental governance in FDI attraction? While Vietnam and businesses are moving towards sustainability, hubs of environmental concerns remain in attractive investment destinations, requiring a change in order to become competitive.