Ministry adjusting FDI attraction orientation

09:07 | 28/01/2019 Economy

(VEN) - Vietnam seeks to attract foreign direct investment (FDI) in high, new and environmentally friendly technologies, including transnational corporations that can create a positive impact on the domestic business community.

ministry adjusting fdi attraction orientation

FDI sector limitations

According to the Ministry of Planning and Investment’s data, Vietnam attracted US$35.46 billion in FDI capital in 2018, equal to 98.8 percent of that in the same period of 2017. Particularly, disbursed FDI capital hit a record of US$19.1 billion, an increase of 9.1 percent against 2017. The processing industry was the biggest FDI attractor with US$16.58 billion (accounting for 46.7 of the total), followed by real estate with US$6.6 billion (18.6 percent), and retail and wholesale with US$3.6 billion (10.3 percent).

Speaking at a conference on future outlook of FDI attraction and implementation recently held by the Ministry of Planning and Investment in coordination with the Vinh Phuc Province People's Committee, Deputy Prime Minister Trinh Dinh Dung said Vietnam attracted more than US$330 billion in FDI from 1987 to November 2018. FDI has contributed to Vietnam's socioeconomic development, macroeconomic stability and export growth, he said.

However, the deputy prime minister frankly pointed out that the FDI sector suffers certain limitations, as its connectivity with and influence on the domestic economic sector remains poor. FDI is focused in a limited number of sectors, while not all technologies of FDI enterprises in Vietnam are advanced and of high quality, Dung said. Vietnam needs to have a more appropriate FDI attraction orientation if it is to attract higher quality investment.

Deputy Minister of Planning and Investment Vu Dai Thang said his office is developing a plan for FDI attraction, with priority given to facilitating investment in high technology, new technology and IT industries in accordance with the Fourth Industrial Revolution or Industry 4.0.

Policy improvement

The Ministry of Planning and Investment’s FDI attraction orientation is adjusted for the latest developments, but Vietnam needs to further improve its investment environment if it is to reach targets, economists said.

Deputy Prime Minister Trinh Dinh Dung said Vietnam needs to take the initiative in improving FDI attraction institutions, better policy enforcement capacity of state officers and take opportunities to attract the best investors. The country also needs to improve policies on land, the environment and the quality of human resources, he said.

Vietnam will not attract FDI at all cost so FDI enterprises in Vietnam must strictly follow the country’s policies and laws and implement their commitments. They should focus on high, new and environmentally friendly technology projects, promote technology transfer, and strengthen connectivity with domestic enterprises to help Vietnam integrate deeper into international economic communities.

Nguyen Hoa