Experts call for change to accommodate rising FDI flows

Experts at the Ministry of Planning and Investment’s Foreign Investment Agency (FIA) assumed that several points need more profound analysis when it comes to Vietnam’s foreign direct investment panorama, featuring fresh constituent factors.

This lays down the groundwork for the country’s target to lure $24 billion in total committed and $15.5 billion in disbursed FDI next year.

Accordingly, newly registered projects were on an upward trend. For the year to the end of November, Vietnam granted investment certificates to 2,240 new FDI projects, a 20.8 per cent jump on-year.

The projects proposing capital expansion numbered 1,075, up 55.3 per cent on-year.

Besides, during these 11 months, FDI projects disbursed $14.3 billion, up 8.3 per cent on-year.

“The statistical figures indicate clear signs in the investment trends of both newly-licensed and supplemental capital projects. Specifically, disbursed FDI volumes show that FDI firms are having favourable circumstances,” a recent FIA report noted.

FIA experts also highlight further positivity in the year’s FDI picture as investments in capital contribution and stake purchase forms both increased.

Particularly, during January-November a total of 2,194 foreign investors and businesses contributed $3.9 billion via these models and foreign investors’ capital contribution was at least 51 per cent.

In general, if this kind of investment was included, foreign investors’ total committed FDI volumes for the year to the end of November hit $22 billion, an 8.9 per cent jump on-year.

“The investment-business circle is on a quest to uncover new investment opportunities in Vietnam. Recent positive changes in the regulatory system are shaping new investment channels for foreign investment flows. The signs show that the investors do not want to miss out on the opportunity,” the report commented.

From the statistical angle, the capital scope of licensed FDI projects this year, however, was smaller than last year.

Over the past 11 months, only one project surpassed the $1-billion mark, South Korean tech giant LG’s $1.5-billion OLED screen manufacturing project in the northern port city of Haiphong.

Meanwhile, last year was regarded a bumper year of mammoth FDI projects. If only projects exceeding $1 billion were taken into account, the country celebrated the $3-billion Samsung Display Vietnam project of Korean tech titan Samsung Group, the $2.4-billion Duyen Hai 2 thermal power plant in the Mekong Delta province of Tra Vinh, and $1.2-billion Empire City JV Company in Ho Chi Minh City.

Several other billion-dollar projects, such as the $2.5-billion Nghi Son 2 build-operate-transfer power project and the $2.5-billion Vung Ang 2 power project are reportedly in the phase of legal setup.

“The presence of sizable projects is important, but what has commanded the attention of investors and state management agencies’ responsibility was the issue of realising investors’ expectations.”

“Concerted efforts from state management agencies are needed to help improve the investment and business climate and further reform administrative procedures.”

“In the context of still vulnerable standing in the world, global FDI flows will bear certain impacts, requiring positive and ground-breaking changes,” FIA experts concluded.