The article on cbgabd.org (Photo: VNA) Hanoi (VNA) – Central to Vietnam's economic narrative is thesubstantial influx of foreign direct investment (FDI), whichhas played a crucial role in driving growth and fostering development acrossvarious sectors, according to an article published by the KRF Centre for Bangladeshand Global Affairs on its website cbgabd.org.
The period from 2002 to 2023 witnessed Vietnam's remarkableeconomic expansion, underscoring the significant impact of strategicinvestments and forward-thinking policies, it said.
It added that over 35 years, Vietnam's registered FDI hasexperienced remarkable growth, surging from 2 million USD in 1988 to astaggering 550 billion USD by the end of 2023. The current foreign investmentlandscape in Vietnam is characterised by billions of US dollars fueling economicgrowth.
Thecountry's strategic focus on high-tech sectors, including agriculture,manufacturing, services, and travel, further enhances its appeal for international investors. Also, Vietnam boasts over 36,000active FDI projects with atotal fund of 441 billion USD. Notably, 57% of these funds have been disbursed,reflecting the robustness of theforeign investment landscape in the country.
Overthe past three decades, the Republic of Korea, Singapore and Japan have emergedas the top contributors to Vietnam's FDI landscape. With the upgrade of Vietnam-USrelations to a Comprehensive strategic partnership in September 2023, expectations rise for a forthcoming fourth wave of FDI.
Accordingto the article, Vietnam's strategic geographic location as a manufacturing huband its pivotal role in the "China 1" strategy highlight itssignificance in East Asia's economic landscape. Vietnam provides a conducive environmentfor investment, thanks to its stable government, well-defined economic vision,fair policy control, minimal investment barriers, and attractive incentiveschemes.
The nation'sdedication to enhancing its business environment is apparent in its increasingrankings for ease of doing business, bolstered by a regulatory framework that emphasisesefficiency and transparency. With a population of over 95 million, a growingmiddle class,and a services sector that contributes over 40% to its GDP, Vietnam offers apromising market for businesses. This is further supported by the risingconsumer spending in the country. This combination of factors underscores Vietnam's impressive economic growthand its potential for reliable investmentreturns on both regional and global levels.
Moreover, Vietnam's active involvement in major global trade agreements, includingthe Regional Comprehensive Economic Partnership (RCEP), Comprehensive andProgressive Agreement for Trans-Pacific Partnership (CPTPP), and the EU-VietnamFree Trade Agreement (EVFTA), has solidified its status as a sought-after destinationfor international trade. Vietnam'sextensive network of Double Tax Avoidance Agreements with over 80 countries andterritories is a crucial factor that attracts foreign investors.These agreements create a tax-friendly environment and encourage investmentsacross borders, relieving the burden of double taxation.
Vietnam'sfocus on infrastructure development, as highlighted in its transport infrastructuremaster plan, also demonstrates a proactiveapproach to bolster economic growth. It has a labour market that is both largeand highly competitive, with around 60 million individuals. The Vietnamese Government's consistentefforts to draw foreign investors through a range of incentives, particularly tax incentives,are crucial.
Inconclusion, the article said with a stable government and a clear economicvision, Vietnam provides investors with a favourable environment characterisedby fair policy control, minimal investment barriers, and robust incentive schemes./.
