Business

Experts: Vietnam yet to take full advantage of FDI

Vietnam has not taken full advantage of foreign direct investment (FDI) while its private enterprises have failed to connect with the global production chain.
Experts: Vietnam yet to take full advantage of FDI ảnh 1Inside an automobile production plant in Vietnam (Photo: VNA)

Hanoi (VNA) – Vietnam has not taken full advantage of foreign directinvestment (FDI) while its private enterprises have failed to connect with theglobal production chain, heard the Midterm Vietnam Business Forum (VBF) 2017held in Hanoi on June 16.

Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc, whois also Co-chairman of the VBF Consortium’s Management Board, said that therehas been a poor linkage between foreign and domestic investors while theknock-on effect in terms of technology and labour productivity from foreignfirms on Vietnamese firms remains limited.

According to a survey conducted by VCCI, the proportion of domestic businessessupplying commodities and services for FDI enterprises is pretty low. TheProvincial Competitiveness Index (PCI) report in 2016 showed that only 14percent of private businesses have customers that are FDI enterprises operatingin Vietnam.

Less than 27 percent of FDI firms’ input materials were purchased fromVietnamese partners while a substantial amount was bought from other FDIcompanies. High-tech FDI enterprises tend to import input materials from theirhomeland.

The real situation was attributed to puny marketing policies, inefficientindustry support programmes and domestic firms’ failure to provide supplies thatmeet standards in production management and quality of from FDI enterprises.

Loc said that improving the qualifications of human resources is the key topromoting FDI businesses’ effects on domestic enterprises.

Vietnam needsto mobilise all resources to better competitive capacity of private enterprisesand the Government should realise policies to bolster the supporting industry,Loc recommended.

Tomaso Andreatta, Vice Chairman of the European Chamber of Commerce in Vietnam(EuroCham) and member of the VBF Consortium’s Management Board, expectedfurther improvements in Vietnam’s business climate which help bring morepractical effects to the business community. This will contribute to building mutualtrust and support among private and FDI enterprises, he added.

Meanwhile, Jonathan Moreno, Chairman of the US Business Community in Vietnam,affirmed that reducing operating costs and simplifying business procedures willbenefit Vietnamese firms, most of them are small- and medium-sized enterprises,thus enhancing the Vietnamese economy’s competitiveness edge.-VNA
VNA
#FDI #advantage #global production chain #Midterm Vietnam Business Forum #VCCI #knock-on effect #poor linkage #Vietnamese firms #puny marketing policies
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