The inflow of foreign direct investment (FDI) to Vietnam is increasing constantly, according to Minister of Planning and Investment Vo Hong Phuc. The newly registered capital was only US$2.8 billion in 2002 and grew to US$3.1 billion in 2003. The figure increased to US$4.2 billion in 2004 and is expected to reach more than US$5 billion this year.
Last year, the FDI inflow to Vietnam ranked 50th in the world, higher than many other countries in Southeast Asia. Therefore, foreign-invested enterprises (FIE) have greatly contributed to the State budget and economic growth, making up more than 17 percent of the whole society’s total investment and accounting for more than 15 percent of GDP, 43 percent of industrial value and 54 percent of production value. The foreign-invested sector has generated jobs for more than 800,000 skilled workers and millions of indirect labourers. Currently, more than 100 trans-national corporations have been operating in Vietnam to help expand markets and raising export capacity, thus increasing competitiveness of the national economy. FIE has now become an important part of Vietnam’s economy.
Meanwhile, the National Assembly will the Common Investment Law to create favourable conditions for foreign investors to operate in Vietnam.
Minister Phuc emphasised that the next five-year period is very important for the industrialisation and modernisation process to bring Vietnam out of the under-developed status. Along with implementing international commitments, the economic sector will actively take part in the ASEAN Free Trade Area (AFTA), the Vietnam-US Bilateral Trade Agreement (BTA) and the World Trade Organisation (WTO).
The most important tasks are to speed up the growth rate and economic restructuring, improve the quality of growth and sharpen the competitive edge. There should be comprehensive system of measures to fulfil the tasks. An amount of US$139 billion investment capital will be mobilised in five years from all resources. While local capital sources account for two-thirds of total investment capital, FDI inflow also makes up an important proportion.
To speed up the process, the state plans to continue improving the investment environment and opening up markets in accordance with international commitments. The ongoing NA session will consider and approve the Unified Investment Law and the Common Enterprise Law to create a level playing field for both local and foreign investors. Therefore, Vietnam expects to welcome a new inflow of foreign investment in near future.
Minister Phuc said to improve the business environment, Vietnam should perfect the legal environment and administrative reforms and improve the civil servants’ qualifications. In addition, the country should build an overall strategy to lure foreign investment. There would be restrictions in certain fields of investment to keep tune with the open-door policy of the Party and State as well as international commitments.
VOV - (10/11/2005)