Raising the quality of FDI inflow

09:53 | 09/05/2018 Economy

Ho Chi Minh City currently tops the nation in terms of foreign direct investment (FDI) attraction, with more than 7,490 projects and total capital of US$44.5 billion, accounting for nearly 13.9 percent of the country’s total figure.

Jotun Paints Vietnam signs a contract to lease 10 hectares of land in Hiep Phuoc IZ

The positive result is attributed to the city’s efforts in improving the investment environment to enhance the quality of FDI inflow, with a focus on attracting hi-tech and environmentally friendly projects.

In late April, Jotun Paints Vietnam signed a contract to lease 10 hectares of land in Hiep Phuoc Industrial Zone, Nha Be district, in order to build a factory. This is the second project of Jotun in Vietnam that is using modern technology and is considered a “Green Building” in Hiep Phuoc Industrial Zone, with a capacity of 10 times that of the first factory located in the southern province of Binh Duong. In the first phase, the US$70 million factory is scheduled to produce 80 million litres of liquid paint and 10 million kilogrammes of powder paint.

According to representatives of the Jotun Group, in addition to the convenient location, the simplification of investment procedures is also the main reason why they have chosen to build a plant in the Hiep Phuoc Industrial Park. Specifically, the Hiep Phuoc Industrial Park issued a certificate of investment within less than a month; as well as support for recruitment, training, and accommodation for workers. It is also a milestone marking the 200th enterprise to invest in the industrial park.

The city has attracted more investment thanks to the drastic improvement in the investment environment, the active promotion of administrative reform, and the simplification and abolishment of unnecessary procedures. In 2017, the city attracted a number of large investment projects with modern and advanced technologies, such as a smart complex in the city Thu Thiem New Urban Area with a total investment of over US$885 million; the KNT ASIA project with total capital of US$215 million; Tech Mastery Vietnam Co., Ltd with a total investment of US$80 million.

According to the latest statistics from the Ministry of Planning and Investment’s Foreign Investment Agency (FIA), the city continued to lead the nation in FDI attraction in the first four months of this year, with a total of US$1.92 billion, accounting for 23.8% of the country’s total figure. In particular, the total capital of FDI projects that registered additional capital increased by more than US$500 million, up 33.2% over the same period last year.

According to Kim Heung Soo, chairman of the Korean Chamber of Commerce and Industry in Ho Chi Minh City, the Republic of Korea currently has 1,200 projects of enterprises operating in the city. In recent years, the city has improved the business and investment environment. With the current policy of openness, many RoK corporations and enterprises are continuing to seek investment opportunities in the city.

Director of the Ho Chi Minh City Department of Planning and Investment Su Ngoc Anh said that, in the near future, the city will step up the application of information technology to handle administrative procedures in order to save time and money for enterprises, while promoting investment, and supporting and helping enterprises to resolve any difficulties.

At the recently meeting between the city leaders and FDI businesses, the Chairman of the Ho Chi Minh City People’s Committee emphasised that, over the past few years, the city has made efforts to improve its investment climate, step up administrative reforms, streamline procedures, increase transparency and boost IT application in the settlement of administrative procedures to enhance its attractiveness to foreign investment. He also affirmed that Ho Chi Minh City considers businesses and people’s satisfaction as the meter of its development and the efficiency of its administrative apparatus’ performance.

A representative of the European Chamber of Commerce in Vietnam (EuroCham Vietnam) said that European companies want HCM City to put forth more open and transparent policies. The legal system regarding investment activities needs to be consistent in both theory and practice. It is also necessary to improve the quality of human resources, not only manual workers but also middle and high-level manpower, in order to meet the foreign businesses’ demand.

Meanwhile, Saranya Skontanarak, Chairwoman of the Thai Business (Vietnam) Association, said that the quality of manpower not only affects the attractiveness to foreign investment but also serves as a decisive factor in the success of smart city building.

She added that Ho Chi Minh City, and on a larger scale, Vietnam, no longer has labour cost advantages. Therefore, the city must deploy solutions to promote labour productivity and quality. Building a smart city requires not only modern technology but also capable personnel to operate the system and enjoy the benefits that it will generate.

Theo NDO