14:04 | 10/06/2015 Economy
(VEN) - Many foreign investors believe Vietnam will have a lot of opportunities to attract investment thanks to macroeconomic stability and major reforms which are underway in the country. It is predicted that the Vietnamese economy will grow more than six percent this year. The establishment of the ASEAN Economic Community (AEC) as a single marketplace is expected to further solidify Vietnam’s position as the region’s manufacturing hub.
At a recent Invest ASEAN 2015 conference in Ho Chi Minh City, Maybank Kim Eng Group Chief Executive Officer John Chong said that Vietnam had a strategic position near global supply chains and a low-cost, youthful, educated, and diligent workforce. The Organization for Economic Cooperation and Development (OECD) recently ranked Vietnam 12th in its global education ranking list in terms of mathematics and science study. The labor cost in Vietnam equals just half of that in China, Thailand, the Philippines, or even Malaysia, making it an exceptionally competitive economy in an already attractive region, ASEAN. These advantages will help Vietnam become not only a manufacturing hub for ASEAN but also a factory of the world.
FDI has been one of the factors contributing to the growth of the Vietnamese economy in recent years, accounting for over five percent of the country’s gross domestic product (GDP). Nguyen Van Dung, Deputy Director of the Foreign Investment Agency under the Ministry of Planning and Investment, said that the AEC and free trade agreements such as the Trans-Pacific Partnership (TPP) agreement would bring Vietnam a lot of opportunities. The Vietnamese government has offered foreign investors growing preferences and improved the investment environment while at the same time simplifying administrative procedures to save time and money for investors.
Vietnam has successfully exported many kinds of products. From 2010-2014, Vietnamese exports grew an average 19.6 percent per year, much higher compared with other ASEAN countries such as Thailand, Indonesia, and Malaysia. Notably, the structure of exports has changed to include more products of higher added value such as machinery, vehicles, chemicals, and electronic products, said Professor Vu Minh Khuong from the Lee Kuan Yew School of Public Policy.
Vietnam-Singapore Industrial Park Joint Venture Company Limited Deputy General Director Huynh Quang Hai said that many foreign investors chose Vietnam because the labor cost in Vietnam was lower compared with other countries in the region. Moreover, investors are looking towards their presence in global supply chains as Vietnam has become a destination for world-leading electronic manufacturers with projects worth billions of US dollars such as Intel, and Samsung. It is expected that there will be a new wave of investment into Vietnam after the TPP is signed.
However, investors, economists and analysts think that difficulties to face Vietnam in its development process include a decline in foreign aid (because Vietnam has become a middle-income country), low effectiveness of investment, and population aging. These difficulties require the Vietnamese government to further improve the software and hardware infrastructure, and the quality of training, especially manager and technical staff training./.
By Ngoc Thao