Selecting high quality and added-value projects using modern technology, particularly in the fields of information technology and biotechnology serving agriculture, is one of the measures to continue improving the efficiency of FDI attraction in 2014.

The suggestion was made by Deputy Minister of Planning and Investment Nguyen Van Trung at a recent workshop on foreign direct investment (FDI) in Ho Chi Minh City.

He also stressed the need to effectively implement the Government’s Resolution 103/NQ-CP dated August 29, 2013, on orientations to improve FDI attraction, use and management in the coming time.

In this resolution, the Government entrusted the Ministry of Planning and Investment (MPI), in coordination with relevant ministries, agencies and localities, to draft many bills, including the revised Investment and Enterprise Laws.

The effective implementation of the resolution is very significant for improving the investment climate and raising Vietnam’s competitiveness in FDI attraction, contributing to the growth and sustainable development of the economy, Trung stressed.

Director of the MPI’s Foreign Investment Department Do Nhat Hoang said investment policies must be coupled with incentives, which are applied uniformly in all sectors and localities.

Localities should pay attention to small and medium-scale projects in line with each economic sector and locality; encourage, facilitate and strengthen links among FDI businesses and between them and domestic enterprises, he said.

He also suggested making plans to lure FDI by sector, field and partner in line with the advantages of each region and sector, ensuring overall national interests and economic restructuring under a new growth model.

Deputy Minister Trung affirmed that FDI has added an important source to Vietnam ’s economic development investment, helping the country improve its production capacity, renovate technology, increase export turnover and change the structure of export commodities, he said.

Since Vietnam began luring FDI 25 years ago, the capital has actively contributed to the nation’s growth and development achievements, he added.

Prof. Dr. Nguyen Mai, Chairman of the Vietnam Association of Foreign-Invested Enterprises, highlighted the FDI sector’s great contributions to Vietnam ’s economy, especially when the world economy and global FDI are yet to recover as expected.

The exports of FDI businesses (excluding crude oil) fetched 81.1 billion USD in 2013, up 26.8 percent against the previous year and accounting for over 61 percent of the country’s total export turnover. They posted a trade surplus of 13.9 billion USD compared to the country’s figure of 863 million USD.

However, many experts said that the country’s FDI attraction has not yet created a development momentum for domestic businesses and FDI enterprises are yet to have great influence on their local peers.

FDI activity over the past time has revealed some shortcomings such as the poor quality of foreign-invested projects, few projects using high technology, and transnational corporations’ limited investment in production chains.

In addition, many FDI businesses have used outdated technology that pollutes the environment while some others have shown signs of transfer pricing to evade taxes, causing budget losses, they said.

According to Mai, the MPI has announced that more than 500 FDI enterprises stopped operations with a total investment of nearly one billion USD, and many business owners returned to their home countries.

Therefore, the ministry needs to make more synchronous and rapid renovations in the State management of FDI in the direction of creating more favourable conditions for investors and businesses, he noted.

By the end of 2013, Vietnam boasted nearly 15,700 valid FDI projects, with a total registered capital of more than 230 billion USD, of which over 112 billion USD was disbursed.

Last year alone, the country had 1,275 new foreign-invested projects with a total registered capital of 14.27 billion USD, and 472 projects raised investment with a combined additional capital of 7.3 billion USD. FDI disbursement was estimated at 11.5 billion USD, up nearly 10 percent against 2012.-VNA