Transparency needed to attract Fortune-500 firms

06:00 | 25/07/2022 Economy

(VEN) - Vietnam is fully capable of attracting the largest Fortune-500 corporations if the country exploits its potential and makes good use of opportunities. Nguyen Van Toan, deputy chairman of Vietnam’s Association of Foreign-Invested Enterprises, talked about the issue with Vietnam Economic News’ Nguyen Hoa.

transparency needed to attract fortune 500 firms
Nguyen Van Toan, deputy chairman of Vietnam’s Association of Foreign-Invested Enterprises

Vietnam attracted US$11.7 billion in foreign direct investment (FDI) in the first five months of the year. How do you evaluate this result?

In the first five months of 2022, FDI pledges to Vietnam were 16.3 percent lower than the figure recorded in the same period last year due to a strong decline in newly registered capital. Specifically, foreign investment in new projects declined by 53.4 percent to US$4.12 billion.

In my opinion, newly registered capital depends on the initial survey of investors. Due to the impact of the COVID-19 pandemic, which has affected the travel of investors, project evaluation surveys have been delayed.

In addition, Vietnam attracted many large-scale FDI projects worth more than US$100 million in 2021. These projects accounted for 70.9 percent of total registered capital in the first five months of 2021, compared with 46 percent in the first five months of 2022.

Can Vietnam exceed US$31 billion in FDI in 2022?

While newly registered capital saw a 53.4 percent decline in the first five months of the year, the capital poured into existing projects surged by 45.4 percent and capital contributions and share purchases by foreign investors increased by 51.6 percent compared to the same period last year. In particular, FDI disbursement experienced a positive yearly increase of 7.8 percent to US$7.71 billion.

FDI disbursement is really a measurement to evaluate the effectiveness of FDI inflows, while a strong increase in additional capital proves that foreign investors have high trust in Vietnam’s economic recovery.

Although FDI pledges to Vietnam were lower than the same period last year, it doesn’t mean anything. Vietnam remains an attractive investment destination for foreign investors thanks to its potential and advantages, high COVID-19 vaccination rates and government efforts to restore trade and production activities. Therefore, Vietnam is entirely capable of attracting more foreign capital in the coming time.

Vietnam’s investment and cooperation strategy in the 2021-2030 period aims to attract top Fortune-500 corporations. What is your opinion?

Vietnam is fully capable of attracting the Fortune-listed 500 largest global corporations if the country knows how to exploit its potential and make good use of opportunities and continues to improve the business and investment environment towards transparency.

As large global corporations have stricter requirements on technologies, quality of human resources and transparency in institutions, policies and the business and investment environment, the Politburo issued Resolution 50-NQ/TW on orientations to perfect institutions and policies and improve the quality and efficiency of investment.

In addition to limitations in the quality of human resources and technologies, Vietnam still faces challenges due to the lack of transparency, clarity and consistency in mechanisms and policies in FDI attraction. Therefore, to attract large global corporations, the country needs to continue to improve institutions and policies in order to build a truly transparent investment environment.

Nguyen Hoa