Better Quality Foreign Investment Sought

FDI as a percentage of gross domestic product (GDP) increased from 13.28 percent in 2000 to 15.13 percent in 2004 and 18.33 percent in 2009 (VEN) - Vietnam has been seen as a good place for foreign investors in recent years. However, experts believe that the country should be choosier about the foreign investors that are awarded licenses.   The General Statistical Office under the Ministry of Planning and Investment said that by the end of 2009 Vietnam had attracted 12,575 foreign direct investment (FDI) projects with total registered capital of US$194,429 million, of which US$66,945 million had been invested. For years now, the FDI sector has made great contributions to economic development in Vietnam. FDI as a percentage of gross domestic product (GDP) increased from 13.28 percent in 2000 to 15.13 percent in 2004 and 18.33 percent in 2009. Import-exports in the FDI sector also increased from US$7,658 million in 2000, US$19,786 million in 2004 and US$48,567 million in 2009. The Ministry of Planning and Investment also said that the FDI sector employed 407,000 people in 2000, 950,000 in 2004 and 1,700,000 in 2009. However, Nguyen Thi Lan Huong, the director of the Institute of Labor and Social Sciences under the Ministry of Labor, War Invalids and Social Affairs, said that most employees in the FDI sector are manual workers and are unlikely to create high added value for the society. The FDI sector has made a vital contribution to the Vietnamese economy. In particular, the sector has helped Vietnam achieve large progress in integrating into the world market and improve export capability. However, experts said that FDI involvement in certain sectors of the Vietnamese economy in recent years had not been appropriate. Statistics by the Foreign Investment Department under the Ministry of Planning and Investment show that FDI in agriculture has declined year on year accounting for about 6 percent of total registered FDI capital in 2006, 5.24 percent in 2007, 3.3 percent in 2008, and only 1 percent in 2009. Meanwhile, FDI has increased in the service and real estate sectors making up 70 percent of total FDI in the country in 2009. This explains why investment licenses for a number of real estate projects were withdrawn earlier this year. In particular, Vietnam has withdrawn the investment license for the US-invested TANO Capital and Global C&D’s Rong Beach 'super-development' in Quang Nam Province, with registered capital of US$4.2 billion, due to slow development. Now is time for Vietnam to be more wise in choosing FDI investors, said Dr. Nguyen Ba An, the deputy director of the Development Strategy Institute under the Ministry of Planning and Investment. He said that hi-tech businesses should be a top priority in attracting investment in Vietnam in the near future. Cao Viet Sinh, the Deputy Minister of Planning and Investment, said that Vietnam will have to improve the quality of FDI by restricting those projects that pollute the environment and consume large amounts of energy; while encouraging hi-tech and environmentally friendly producers. Do Nhat Hoang, the head of the Foreign Investment Department under the Ministry of Planning and Investment, said that to attract better FDI the government recently issued Resolution 13 assigning the Ministry of Planning and Investment to work with related ministries and agencies to compose areas under national investment promotion including infrastructure, manufacturing, agriculture-forestry-fisheries, high-quality urban areas, support industries and more./.