16:29 | 16/04/2014 Investment
(VEN) - FDI attraction figures remain positive in 2014, Foreign Investment Business Association Deputy Chairman Nguyen Van Toan told Vietnam Economic News’ reporter Nguyen Hoa in a recent interview.
Foreign direct investment (FDI) in Vietnam in the first three months accounted for only 50.4 percent of that in the same period last year. What do you think about it?
FDI attraction in these months was much less than that a year ago. However, FDI in the first three months of the year doesn’t reveal much and shouldn’t be the basis for predicting FDI attraction for the whole year, because businesses are often busy with tax finalization and financial reporting in the first quarter of the year. FDI businesses really begin their investment projects from the second quarter of the year.
I think, FDI attraction would still grow this year. We have done much in recent years to improve the efficiency and quality of FDI, rather than attracting it at any cost. Moreover, Prime Minister Nguyen Tan Dung released his Resolution 103/NQ-CP last year, regarding directions to improve the efficiency, use and management of FDI in the short run. In addition, Vietnam is amending its Investment Law which is a step to show its determination to make the investment environment more attractive.
FDI soared last year as a result of seven billion-US-dollar projects. Do you know any giant FDI projects intending to enter Vietnam this year?
US power giant Exxon Mobil intends to invest US$20 billion in a gas-power complex project in Quang Ngai Province. Local authorities are delighted about this and are getting ready to negotiate with the investor. However, as the project is now under consideration, we can’t anything but to wait and see.
FDI in the processing and manufacturing sector has increased rapidly in recent years, while FDI in agriculture remains modest. Why?
Vietnam attracted US$3.334 billion in FDI in the first three months of this year accounting for 50.3 percent of that in the same period last year. Of this, the processing and manufacturing sector attracted US$2.332 billion accounting for 69.9 percent of total FDI in the country.
As far as I know, FDI in agriculture in recent years has even declined, while investment in processing and manufacturing has soared accounting for 69.9 percent of total FDI in Vietnam in the first three months of this year.
It’s understandable, as for investors profit is the most important factor. Obviously, investment in agriculture faces huge risks which are associated with the whole production chain ranging from production to sales. Moreover, investment in agriculture requires time, capital and land, while investment in processing and manufacturing is much easier and is not affected by external factors such as the weather. Vietnam has a population of more than 90 million, while the cost of labor and energy is lower than in several other countries in region; infrastructure is progressively improving and investment policies are favorable providing opportunities for FDI in the processing and manufacturing sector./.