14:03 | 31/07/2017 Investment
(VEN) - The government will encourage foreign direct investment (FDI) projects that are based on modern technology, are environmentally friendly and willing to cooperate with Vietnamese businesses, said Deputy Prime Minister Vuong Dinh Hue at the mid-term 2017 Vietnam Business Forum (VBF 2017).
FDI and domestic enterprise gap
Deputy Prime Minister Vuong Dinh Hue said at VBF 2017 that there is a gap between FDI and domestic sectors.
According to Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), the number of joint ventures between Vietnamese and foreign companies is too small. In addition, about 80 percent of FDI businesses in Vietnam are wholly foreign owned companies; only 14 percent of private enterprises in Vietnam have customers that are FDI enterprises operating in Vietnam; only 26.6 percent of FDI enterprises’ inputs were purchased in Vietnam, with most of these bought from other FDI enterprises.
While FDI enterprises operating in the field of high-tech production tend to import goods from their countries, Vietnamese enterprises have not met the requirements of FDI enterprises in Vietnam.
Deputy Minister of Planning and Investment Dang Huy Dong said Vietnam has so far attracted 23,000 FDI projects totaling more than US$300 billion from 116 countries and partners. The FDI sector has contributed 70 percent and almost 22 percent of Vietnam’s export value and gross domestic product (GDP), respectively, while providing millions of jobs. But there is growing concern about the uneven development of the FDI sector and the domestic private sector.
Promoting quality FDI
Deputy Prime Minister Vuong Dinh Hue said the government wants associations to jointly discuss and hammer out solutions, and the government would welcome their suggestions.
The government will not narrow or weaken the FDI sector, but will create a favorable business environment for both FDI and domestic businesses, Hue said. At the same time, it will devise policies to successfully link the two into a unified economy so that enterprises can integrate into the global and regional value chains and improve their competitiveness, Hue said.
The government has pledged to improve the business environment, support small to medium-sized enterprises (SMEs) and soon promulgate decrees guiding the SME Law implementation.
The government has also committed to making 80 percent of administrative procedures available on the ASEAN Single Window (ASW) by 2018, and directing ministries and authorities to review and amend 73 specialized customs procedures to facilitate doing business.
According to Deputy Prime Minister Hue, the government will focus on solving bottlenecks so that enterprises in all economic sectors can develop.