Major opportunities for FDI disbursement breakthrough

14:05 | 19/02/2014 Economy

(VEN) - Foreign direct investment (FDI) disbursement has improved remarkably in recent years. It is expected that FDI disbursement will see a breakthrough this year after several major FDI projects are being completed and Prime Ministerial Resolution 103/NQ-CP on FDI capital attraction and use takes effect.

Vietnam has attracted FDI for more than 25 years, including a record high US$71 billion in 2008. Despite a decline in FDI in subsequent years due to global economic recession, FDI flows into the country remained high, and the pision between registered and disbursed FDI capital reduced.

Specifically, statistics from the Ministry of Planning and Investment showed that Vietnam attracted US$71 billion in FDI capital in 2008, of which US$11.5 billion was disbursed accounting for more than 16 percent of all registered FDI capital.

Due to efforts of the government and related authorities, the pision between registered and disbursed FDI reduced in subsequent years. Specifically, the country attracted US$23.1 billion in 2009, of which US$10 billion was disbursed accounting for 43 percent of all registered capital; US$18.6 billion, US$11.5 billion and 61.8 percent in 2010; US$14.7 billion, US$11 billion and 74.8 percent in 2011; US$13.013 billion, US$10.5 billion and 80.8 percent in 2012; and US$22 billion, US$11.5 billion and 52.2 percent in 2013, respectively.

Foreign Investment Department Director Do Nhat Hoang said that the reduced pision between registered and disbursed FDI capital showed that the use of FDI in Vietnam became more practical.

Minister of Planning and Investment Bui Quang Vinh said that FDI disbursement was a measure of FDI efficiency. For this reason, he said the ministry would put in place many measures to boost FDI disbursement in the near future.

Resolution 103/NQ-CP, which was  agreed at the end of August 2013, addresses many resolutions to facilitate FDI attraction and disbursement. These include improving investment laws and policies to make them consistent, transparent, public, predictable and favorable for investors, modifying several principles on investment management and decentralization, improving criteria on investment certification, renewing investment promotion activities, and enhancing investment inspection and monitoring.

FDI disbursement is expected to increase rapidly this year as the 2013 Land Law will take effect on July 1, 2014 creating a level playing field for domestic and foreign investors in terms of land use rights. With the existing Land Law, foreign investors must lease land from Vietnamese entities. However, following the 2013 Land Law, central or local authorities will allocate land and apply land rent fees to foreign investors in order for them to develop housing projects for sales or rent. The Ministry of Natural Resources and Environment’s General Department of Land Administration Deputy Head Le Thanh Khuyen considered the change as an important breakthrough, which would facilitate FDI attraction and disbursement in future years.

As a result of strong determination of the government and related ministries and branches, plus the presence of many major FDI projects in 2013, it is expected that FDI disbursement will achieve a breakthrough in 2014./.

By Nguyen Hoa