Fresh foreign direct investment (FDI) approvals tumbled in January after a sharp rise in all of 2013, but there is no concern about this as the country’s macroeconomic situation has stabilised. Analysis by The Saigon Times Daily on February 12.
Last month FDI approvals, including both new and existing projects, reached over 397 million USD, down 21.9 percent year-on-year, according to the General Statistics Office.
This is in stark contrast to last year when new FDI approvals amounted to 21.6 billion USD, up 54.5 percent year-on-year and well above the target of 13-14 billion USD.
FDI attraction is forecast to be fine this year and the following year as the macroeconomy has been stabilised.
The National Financial Supervisory Commission hopes that FDI activities will improve now that the World Bank has projected the world economy to grow 3 percent this year and 3.3 percent next year, compared to last year’s 2.2 percent, and that investors are expecting to benefit from the Trans-Pacific Partnership (TPP) which will be signed soon.
Over the recent past, many multinationals have expressed interest in investing in Vietnam. For instance, Vung Ro Petroleum Company and Rose Rock Group have struck a deal to develop a 2.5-billion-USD resort complex in Vung Ro Bay in the central coastal province of Phu Yen.
Hansol Electronics Vietnam, an affiliate of Samsung, has obtained approval to invest 150 million USD in an electronic components production project to serve Samsung’s phone manufacturing factory in Thai Nguyen province.
Some industry insiders said the FDI inflow would keep coming into the country thanks to its ideal geographic location, cheap labour, a large market with 90 million people and prospects from the TPP and the ASEAN Economic Community.
However, some experts said that the strong FDI inflow in 2013 was unsustainable, so the nation may find it hard to reach such a high figure this year unless foreign investors pump capital into big-ticket projects.
Phan Huu Thang, former head of the Foreign Investment Agency under the Ministry of Planning and Investment, said the substantial rise in FDI approvals last year was far beyond the investment authorities’ expectations. Whether the country can attract more quality foreign investment depends on the competitiveness of the economy and the investment environment.
Increasing the competitiveness depends on the implementation of solutions to increase FDI capital attraction, and use and manage the capital efficiently in the coming time, he said.
In addition, FDI attraction also depends on the results of negotiations of the Vietnam-EU Free Trade Agreement and the TPP and Vietnam’s ability to implement its commitments to those pacts, he said.-VNA
Last month FDI approvals, including both new and existing projects, reached over 397 million USD, down 21.9 percent year-on-year, according to the General Statistics Office.
This is in stark contrast to last year when new FDI approvals amounted to 21.6 billion USD, up 54.5 percent year-on-year and well above the target of 13-14 billion USD.
FDI attraction is forecast to be fine this year and the following year as the macroeconomy has been stabilised.
The National Financial Supervisory Commission hopes that FDI activities will improve now that the World Bank has projected the world economy to grow 3 percent this year and 3.3 percent next year, compared to last year’s 2.2 percent, and that investors are expecting to benefit from the Trans-Pacific Partnership (TPP) which will be signed soon.
Over the recent past, many multinationals have expressed interest in investing in Vietnam. For instance, Vung Ro Petroleum Company and Rose Rock Group have struck a deal to develop a 2.5-billion-USD resort complex in Vung Ro Bay in the central coastal province of Phu Yen.
Hansol Electronics Vietnam, an affiliate of Samsung, has obtained approval to invest 150 million USD in an electronic components production project to serve Samsung’s phone manufacturing factory in Thai Nguyen province.
Some industry insiders said the FDI inflow would keep coming into the country thanks to its ideal geographic location, cheap labour, a large market with 90 million people and prospects from the TPP and the ASEAN Economic Community.
However, some experts said that the strong FDI inflow in 2013 was unsustainable, so the nation may find it hard to reach such a high figure this year unless foreign investors pump capital into big-ticket projects.
Phan Huu Thang, former head of the Foreign Investment Agency under the Ministry of Planning and Investment, said the substantial rise in FDI approvals last year was far beyond the investment authorities’ expectations. Whether the country can attract more quality foreign investment depends on the competitiveness of the economy and the investment environment.
Increasing the competitiveness depends on the implementation of solutions to increase FDI capital attraction, and use and manage the capital efficiently in the coming time, he said.
In addition, FDI attraction also depends on the results of negotiations of the Vietnam-EU Free Trade Agreement and the TPP and Vietnam’s ability to implement its commitments to those pacts, he said.-VNA
