Addressing the passivity of managers in attracting FDI and balancing investment structure are measures Vietnam needs to implement immediately to maintain FDI inflows and reach an expected growth of investment.
A worker irons a lounge suit for export to Japan at Nha Be Textile and Garment Company, in Ho Chi Minh City. (Photo: Duc Thanh)
Vietnam saw a fairly good start in FDI attraction in January with 40 projects being licensed with a total registered capital of over 285 million USD, an increase of 78.2 percent over the same period last year. With this result, many economic analysts showed their optimism about this year’s FDI growth.
However, FDI inflows were put a hold in February, resulting in the total newly-registered and added FDI standing at only 1.78 billion USD in the first two months of this year, equivalent to 27.3 percent of the year-on-year figure.
The country also faces difficulties in targeting FDI inflows to important sectors such as supporting industries, human resource development, agricultural product processing, high valued added services, energy-saving industries and sectors with large export proportion. It is reflected by a majority of projects of over 100 million USD poured into real estate.
In addition, many managers tend to wait for projects instead of actively seeking investors or making specific investment attraction plans for each economic area and each locality.
Vietnam sets a target of attracting around 22 billion USD in newly registered FDI and disbursing between 10-11 billion USD in 2010.
To that end, experts said that the country needs to improve investment promotion quality, target investment attraction to trans-national groups and give priority to technological transfer and environmentally-friendly projects.
Surveying investors’ capacity should be considered an essential phase in FDI appraisal in order to avoid “dead” projects./.