Vietnam remains attractive to foreign investors: paper

Statistics from the Department of Foreign Investment under the Ministry of Planning and Investment (MPI) revealed that FDI registered capital reached 9.53 billion USD by July 20, a year-on-year decrease of nearly 20 percent.

However, the downward trend has showed signs of slowdown, and in the January-July period, foreign investors registered to invest in 889 new projects and expand capital in 300 ongoing projects. The drop in FDI registered capital since early this year has raised concern over the investment environment in Vietnam. However, the MPI said that the fall in FDI pledges was because a series of large-scale projects were licensed in 2013 and this year lacked such projects. In the past seven months, there was only one 1 billion USD project licensed - the Samsung Display project in Bac Ninh province. Other projects have registered capital ranging around 200 - 300 million USD each. MPI Minister Bui Quang Vinh has affirmed that FDI commitments this year are not less than last year, as many large projects were under preparation for being licensed. Another Samsung project, with a total registered capital of 1.4 billion USD, is expected to gain an investment certificate this year in Ho Chi Minh City. Intel Corporation, the world's largest computer chip maker, has announced the closure of its chip assembly plant in Costa Rica and will move its operations to Asia, including Vietnam. This move indicates that foreign investors, particularly major corporations, still see Vietnam as an attractive destination. "Everything goes well and I am optimistic about Vietnam prospects. Regardless of tensions due to China's illegal placement of its oil rig in Vietnamese exclusive economic zone and continental shelf, we see no signal of the withdrawal of foreign investors from Vietnam. This shows that the investment environment in Vietnam remains good," the Chairman of Dutch Business Association Vietnam Remco Gaanderse was quoted as saying. Moreover, localities affected by the riots in May such as Ho Chi Minh City, Binh Duong and Dong Nai still top the nation's list of FDI attraction. Other evidence indicating the stability of Vietnam's investment environment is the operation of FDI enterprises. Statistics from the Department of Foreign Investment showed that the FDI disbursement in the first seven months of this year increased by 2.3 percent over the same period last year. The total export revenue of FDI sector reached 55.83 billion USD, a 15 percent year-on-year increase, accounting for 66.8 percent of the total national export revenue. According to Prof Nguyen Mai, Chairman of the Foreign Investment Business Association, the FDI disbursement rate in the seven-month period is rather good, and is sure to raise the total disbursement for the whole year to 12 billion USD, making up 25 percent of the total social investment capital. In addition, with a trade surplus of 9.78 billion USD in seven months, the FDI sector has made a significant contribution to the total national trade surplus in the period. In future, the FDI sector is expected to make more contributions to the nation, when a series of multinational corporations will officially start their operations in Vietnam. Vice Chairman of Hai Phong city's People Committee, Dan Duc Hiep said that LG Electrics will begin production within two months, only one year after this Republic of Korea's corporation was granted a licence for its 1.5 billion USD project. Bridgestone Corporation, the world's largest tyre and rubber company, is also on its final stages in preparation for tyre production in Hai Phong. However, investors still encounter many challenges such as poor infrastructure, a skilled workforce shortage, complex administrative procedures and a developing legal system. Remco Gaanderse said that Vietnam is attracting FDI projects through its political stability, good economic growth rate and high potential of the consumption market. If the country can remedy its shortcomings, the FDI inflow will probably increase to stronger levels.

(Source: VNA)