Efforts needed to improve FDI quality hinh anh 1An electronic compenent factory of the Japanese-invested Nidec Sankyo Vietnam Co. Ltd in the Saigon Hi-tech Park in Ho Chi Minh City (Photo: VNA)

Hanoi (VNA) – Vietnam attracted 24,397 foreign direct investment (FDI) projects worth 312.9 billion USD from 128 countries and territories in the first 10 months of this year. However, experts said that the projects’ influence on the economy is still modest, necessitating a change in mindset to lure investment.

FDI has been poured into 18 out of 21 sectors and all 63 localities nationwide.

According to the Foreign Investment Agency under the Ministry of Planning and Investment, the FDI sector’s contributions to GDP rose rapidly to 19 percent in 2016 from only 2 percent in 1992.

Exports from the sector accounted for 71.5 percent of the country’s total in 2016, up from 64 percent in 2012. Its contributions to State budget collection also rose from 1.8 billion USD in the 1994-2000 to 14.2 billion USD in 2011-2010. In 2016, the sector paid about 7.1 billion USD to the State budget, accounting for 20 percent of domestic collection and 15 percent of the country’s total income.

However, along with positive contributions, the FDI sector has also faced many problems, as attracting high technology has been difficult.

[Infographics: Vietnam attracts 28.24 billion USD in FDI during Jan-Oct]

Wim Douw, a senior expert for trade and competitiveness policy at the World Bank, said that Vietnam’s FDI attraction over past years has depended largely on low-cost labour resources and investment incentives, while the quality of the investment has stayed low.

But the country’s advantages are fading, while the fourth industrial revolution is changing the world rapidly, he said, stressing that Vietnam should change mindset in calling for investment.

Le Duy Thanh, Vice Chairman of the People’s Committee of Vinh Phuc province stressed that Vietnam should prioritise environmentally friendly projects with modern technology and a strong effect on domestic growth.

Currently, the Ministry of Planning and Investment is building a draft strategy on FDI attraction for 2018-2022, which is expected to tackle problems in the field, driving investment quality upwards.-VNA