14:08 | 04/06/2018 Economy
(VEN) - While foreign direct investment (FDI) in the first four months of this year was only 76.1 percent of the amount attracted in the same period last year, FDI capital that was already invested increased 6.3 percent compared to the first four months of 2017. Economists say Vietnam remains an important destination for foreign investors but should not attract investment at all costs.
A report by the Ministry of Planning and Investment (MPI) showed that in the first four months of this year, 883 FDI projects were licensed with total registered capital of US$3.55 billion, equivalent to 76.1 percent of the same period last year. In the same period, 303 currently operating projects registered to expand their capital, with the total supplemented capital amounting to US$2.24 billion, equivalent to 51.5 percent of the same period in 2017.
In the first four months of this year, foreign investors spent US$2.26 billion purchasing equity and contributing capital to projects, up 67 percent from the same period last year.
A representative of the Ministry of Planning and Investment’s Foreign Investment Agency (FIA) said Vietnam remains an attractive destination for foreign investors due to its large population, big consumer market and labor force, and low labor costs.
International integration is forcing Vietnam to improve its institutions and business environment, improvements that are crucial to turning the country into an important destination for foreign investors in the future, said FIA Director Do Nhat Hoang.
Promoting quality investment
Economists say Vietnam should promote quality investment and refuse substandard investment to increase FDI’s contribution to the economy.
Speaking at a seminar sponsored by the Central Institute for Economic Management (CIEM), Prof. Dr. Nguyen Mai, Chairman of the Vietnam Association of Foreign Investment Enterprises, said the average capital of FDI projects decreased from US$10.5 billion in 2014 to US$3.5 billion in the first months of 2018, and is expected to drop further. It is time for Vietnam to control or say no to FDI projects with too small a scale, Mai said.
Minister of Planning and Investment Nguyen Chi Dung said Vietnam would not attract FDI at all cost. Rather, it will facilitate projects based on high technology, source technology, and a high added value. It will also seek to lure large projects of transnational corporations, which are strong enough to promote the development of the domestic economic sector and of support industries by connecting FDI enterprises with domestic ones. This requires consistent cooperation between relevant authorities and localities, he said.