08:33 | 10/04/2014 Economy
(VEN) - Foreign direct investment (FDI) in Vietnam in the first three months of this year accounted for only 50.4 percent of that recorded in the same period last year. However, experts said that it was too early to say that FDI would reduce in 2014.
Vietnam attracted US$3.334 billion in FDI capital in the first quarter of this year
According to the latest statistics from the Foreign Investment Department under the Ministry of Planning and Investment, Vietnam attracted US$3.334 billion in FDI in the first quarter of this year accounting for 50.4 percent of figure recorded a year ago.
The investment capital comes from 252 new projects with total registered capital of US$2.046 billion (accounting for 64.1 percent of what a year ago) and 82 ongoing projects which increased their capital by US$1.287 billion (39.3 percent).
The Foreign Investment Department said that the decline in FDI in the first quarter of this year was because Vietnam gave investment licenses to several very large projects in the first quarter of last year such as the Samsung Electronics Vietnam Thai Nguyen Co. Ltd.’s US$2 billion project and the Nghi Son Oil Refinery Co., Ltd.’s project in the Nghi Son Economic Zone in Thanh Hoa Province which increased its capital by US$2.8 billion. However, Vietnam did not attract such large projects in the first quarter of this year.
Specifically, the largest FDI projects registered in the first three months of this year have investment capital of just over US$200 million each. For example, the Canadian-invested Hai Duong-based Dai An Vietnam-Canada International Hospital Co. Ltd. project has capital of US$225 million. The Japanese-invested Binh Duong-based Wonderful Saigon Electrics Co. Ltd. project has increased its investment capital by US$210 million manufacturing and assembling semiconductor equipment. The Hong Kong-China-invested project to build apartments and shopping facilities in Ward 22, Binh Thanh District, Ho Chi Minh City, has total investment capital of more than US$200 million.
Although FDI in the first quarter of this year fell sharply from the same period last year, Foreign Investment Business Association Deputy Chairman Nguyen Van Toan said that the decline did not reveal anything as businesses were busy making financial reports in the first quarter of the year and would really begin strong investment in the second quarter.
FDI projects disbursed US$2.85 billion in the first quarter of this year, a 5.6 percent increase from a year ago. Foreign businesses have invested in 15 areas in the country. Of these, the processing and manufacturing sector has received the largest amount of new and supplementary capital (US$2.332 billion) accounting for 69.9 percent of total FDI registered capital.
International organizations also said that the Vietnamese investment environment had obviously improved and that foreign investors had increased their confidence in the Vietnamese investment environment. A recent report from the Japan External Trade Organization (JETRO) indicated that 70 percent of Japanese businesses which were operating in Vietnam wanted to expand their production in the country compared with 66.2 percent in Thailand, 58.1 percent in the Philippines, 54.2 percent in China and 51.6 percent in Malaysia.
Similarly, the European Chamber of Commerce’s 14th survey of European businesses in Vietnam, regarding the business competitiveness index (BCI) in the first quarter of this year, showed that European business confidence in the Vietnamese investment environment increased by nine points to 59 points against the last quarter of last year. The survey revealed that 78 percent of European businesses in Vietnam said that they would increase their capital in Vietnam in the near future.
In this light, the sharp decline in FDI in the first quarter of this year does not mean that FDI in Vietnam would drop in 2014./.
By Nguyen Hoa