Time to take stock of investment progress

Vietnam knows it needs to stay one step ahead of the pack to attract more investment

The analysis will be particularly helpful in drawing conclusions on Vietnam’s comparative advantages and disadvantages, based on the government developing suitable foreign direct investment (FDI) promotion strategies.

Under Official Letter 3237/VPCP-QHQT, dated May 20 by the Government Office, Prime Minister Nguyen Tan Dung has urged the Ministry of Planning and Investment (MPI) to collaborate with the government’s line ministries to assess the advantages and disadvantages of Vietnam as compared to other regional countries.

Dung also ordered the ministries to conduct comprehensive studies on divergence of the foreign investment flows from China to Southeast Asian countries, so as to get a deep understanding of opportunities and challenges facing Vietnam to attract the FDI capital. The final report is to be submitted to the prime minister’s table in the year’s fourth quarter.

“Although foreigners still see Vietnam as an attractive place to invest, we need to know our exact position in the region and in particular our weaknesses in macroeconomic stability,” said Nguyen Xuan Trung, vice head of the MPI’s Foreign Investment Agency.

At present, poor infrastructure, a lack of skilled human resources and complicated administrative procedures remain the biggest challenges for investment attraction in comparison with countries like Thailand, China and Malaysia, Trung said. He said even some of the country’s dubbed advantages, including low-cost labour, needed to be reconsidered.

According to the official letter, the MPI would have to implement the programme of boosting FDI disbursement this year. Meanwhile, the Ministry of Industry and Trade (MoIT) will have to cooperate with other relevant ministries to make the development plan of supporting industries, encouraging private investors to invest into the industries.

The Ministry of Natural Resource and Environment (MoNRE) will be responsible to review the plan of using land for FDI projects, reassessing the impact of developing industrial zones, economic zones and golf course. The MoNRE and MoIT have to submit the results to the prime minister in the third quarter. Last year, foreign investors committed $21.3 billion in FDI capital to Vietnam.

During the first four months of this year, foreign investors pledged an additional $7.5 billion.