Vietnam prepares for expected foreign investment boost

06:00 | 22/10/2020 Economy

(VEN) - Vietnam has numerous advantages for luring high-quality foreign direct investment (FDI) from the US, Japan and the EU, but it needs to improve competitiveness and adopt an innovative approach to new capital flows.

vietnam prepares for expected foreign investment boost

Opportunities for capital flows

According to the Foreign Investment Agency under the Ministry of Planning and Investment, the total amount of foreign investment poured into Vietnam this year to September 20 reached US$21.2 billion, equivalent to 81.1 percent of the same period last year. Of the sum, US$13.76 billion were disbursed, equal to 96.8 percent of last year’s amount during the same period. Given a sharp decline in global investment due to the impact of the Covid-19 pandemic, the result is acceptable.

With its existing competitive advantages and strong reforms of the investment environment, as well as effective Covid-19 prevention and control and the benefits and incentives of some 16 free trade agreements to which Vietnam is a signatory, the country is an attractive destination for foreign investors.

Many international corporations are increasingly interested in Vietnam and they have organized online meetings to exchange information and learn more about the country.

According to the Vietnam Business and Investment Fast Track (VBI Fast Track), an organization that offers assistance in promoting business and investment opportunities in Vietnam, global supply chains are shifting due to the impact of the Covid-19 pandemic, providing Vietnam with opportunities for new capital flows. The organization is rushing to organize consultancy and investment promotion activities to connect with US investors.

Improving competitiveness

Pham Phu Ngoc Trai, founder and board chairman of VBI Fast Track, said that thanks to effective Covid-19 prevention and control, Vietnam is moving quickly toward economic recovery. The country will focus on boosting exports, promoting public investment, encouraging domestic consumption and strengthening FDI attraction.

Vietnam needs to rapidly improve the investment environment and promote administrative procedure reforms to receive new capital flows.

VBI Fast Track is looking for opportunities to lure potential investors to quality and effective projects. In addition, it is focusing on advising and supporting investment promotion activities of the Vietnamese government as well as domestic and foreign investors in terms of mechanisms and policies in attracting foreign investment.

International Finance Corporation (IFC) Country Manager for Vietnam, Cambodia and Laos Kyle Kelhofer said Vietnam should reduce costs and improve transparency in order to provide more support for the business community.

Hong Sun, deputy chairman of the Korea Chamber of Business in Vietnam (Korcham), said Vietnam can participate more deeply in global value chains through mergers and acquisitions (M&A) between domestic support industry companies and foreign component manufacturers.

Truong Gia Binh, board chairman of the FPT Group, said the Vietnamese government should focus on improving the business and investment environment, overcoming difficulties for businesses, cleaning up land and factory pollution and building necessary infrastructure, promoting training of high-quality human resources, developing support industries, and simplifying administrative procedures. Businesses should also pay more attention to digital transformation, which is key to progress in the Covid-19 aftermath.

Thanh Thanh