Senior minister forecasts bright foreign investment outlook for Vietnam

06:00 | 08/02/2022 Economy

(VEN) - Despite the heavy impacts of the Covid-19 pandemic, Vietnam achieved satisfactory results in attracting foreign direct investment (FDI) in 2021. Vietnam Economic News’ Nguyen Hoa spoke with Minister of Planning and Investment Nguyen Chi Dung on the prospects of and orientation for high quality FDI attraction in 2022 and the ensuing years.

senior minister forecasts bright foreign investment outlook for vietnam
Minister of Planning and Investment Nguyen Chi Dung

FDI attraction continued to add a bright point to Vietnam’s 2021 economic picture despite the heavy impact of the fourth wave of Covid-19. Could you elaborate on this?

The FDI sector has developed rapidly and become an important part of the Vietnamese economy, significantly contributing to Vietnam’s economic growth, budget revenue and export value, generating jobs and increasing incomes for Vietnamese workers.

In 2021, Vietnam continued to face Covid-19 complications, especially the fourth wave starting in late April directly affecting major industrial manufacturing centers and requiring the country to apply widespread social distancing restrictions. Production, trade and supply chains were disrupted. The pandemic also prevented foreign investors from coming to Vietnam to explore investment opportunities, as well as affected the operations of existing FDI projects in Vietnam. Despite these difficulties, Vietnam attracted about US$31.15 billion of FDI in 2021, a year-on-year increase of 9.2 percent - this included capital of new projects, increases in capital of ongoing projects, and stock purchases. Notably, capital increases of ongoing projects grew strongly, by more than 40.5 percent. Imports and exports by FDI companies soared, reflecting the trust of foreign investors in the Vietnamese investment environment.

What do you think were the reasons behind these satisfactory results of FDI attraction?

These results should be attributed firstly to the efforts of the government, particularly the prime minister, to accompany the business community and share difficulties with its members. The government has acted as an advisor for the Communist Party and requested the National Assembly to promulgate various policies that enable businesses to maintain production and trade while at the same time preventing pandemic spread.

The government has issued some decrees and resolutions on land rent exemption/reduction; support for businesses, cooperatives and household businesses; support for employees and employers; electricity price reduction, among other incentives.

Associations as well as domestic and foreign business communities praised these policies and believe they have contributed to reducing difficulties for businesses. I strongly believe FDI attraction will continue yielding good results in the coming time.

senior minister forecasts bright foreign investment outlook for vietnam
The processing and manufacturing industries are an FDI magnet

Could you share your prediction about FDI flows to Vietnam in 2022 and measures to attract quality projects?

Although the Covid-19 pandemic has adversely affected all aspects of socioeconomic life in all countries, Vietnam attracted major FDI projects in 2021. This reflected the trust of foreign investors in the Vietnamese business environment as well as business support policies of the Vietnamese government.

The results of a recent survey show that 67 percent of European companies are optimistic about the prospects of doing business in Vietnam; Japanese companies believe the Vietnamese economy will recover in the near future; companies of the Republic of Korea have new investment plans in Vietnam; while most US companies praised the Vietnamese government’s efforts to cope with the Covid-19 pandemic and believe the country will soon control it. To attract quality FDI projects in the spirit of Politburo Resolution 50-NQ/TW on the orientation for institutional improvement to enhance the effectiveness of foreign investment cooperation until 2030, the Vietnamese government is improving investment management policies and trade promotion activities. At the same time, the government is intensifying inspection and supervision along with highlighting the responsibility of local authorities in implementing laws and policies on foreign investment. Projects polluting the environment and inefficient ones will be dealt with thoroughly.