Vietnam is named 19th among the world’s top 20 host economies for FDI in 2020. (Photo: VNA) Hanoi (VNS/VNA) - Vietnam was named among the world’s top 20 hosteconomies for foreign direct investment (FDI) for the first time in2020 with an inflow of 16 billion USD.
The countrywas up five places against last year’s ranking to reach 19thon the list, according to UN Conference on Trade and Development(UNCTAD)’s World Investment Report 2021.
Whileglobal FDI flows fell by 35 percent to 1 trillion USD amid the COVID-19 pandemic,the lowest level since 2005 and almost 20 percent lower than the 2009 troughafter the global financial crisis, the FDI in Southeast Asia, consideredan engine of global FDI growth for the past decade, contracted by 25 percent to136 billion USD, said the report.
It statedthat Vietnam remained among the three largest recipients in the regionwith a decline of only 2 percent, while the remaining two of Singapore andIndonesia suffered drops of up to 21 percent and 22 percent, respectively.
Accordingto UNCTAD, a slight decline in FDI to the country was due tosignificantly lower investment contractions in manufacturing and realtyactivities.
However,thanks to the rise in investment in electricity projects, including a 5billion USD gas-fired power plant proposed by ExxonMobil (US) and a 2.2 billionUSD coal-fired power plant developed by Thai MNEs in the Quang Tri EconomicZone, the flow of FDI was still okay.
Asinvestors, Singapore and Japan topped the list of countries andterritories having investment projects, in which Singapore’s reached 5.64billion USD, 37 percent of the total and Japan invested 2.44 billionUSD, a surge of 67 percent in investment compared to 2019.
UNCTADpointed out local measures to promote investment, including thepermission for certain disputes between foreign investors and the State to betaken to international arbitration, were keys to attract FDI inflows.
The reportalso said the Vietnamese government has expanded the list of businesslines eligible for investment incentives, along with the publishing of adetailed list of conditions applied for businesses to be considered high-techenterprises eligible for tax incentives as good points.
“Vietnam forthe first time introduced a negative list on market access, affording foreigninvestors with national treatment (NT) except in the sectors included in thatlist. The country also raised the cap on foreign ownership in domesticairlines.”
According tothe report released late June, the US continued to be the world’s largestFDI recipient, followed by China and Hong Kong (China).
UNCTADexpected global FDI flows to bottom out in 2021 and later recover some lostground, with an increase of about 10-15 percent.
The reportsaid: “This would still leave FDI some 25 percent below the 2019 level,”adding current forecasts show a further increase in 2022 when the upperbound of projections would bring FDI back to the 2019 level.
The reportconcluded: “Prospects are highly uncertain and will depend on, among otherfactors, the pace of economic recovery and the possibility of pandemicrelapses, the potential impact on FDI of recovery spending packages, and policypressures.”
Inthe first six months of 2021, the total FDI commitments to Vietnamdeclined by 2.6 percent year-on-year to 15.27 billion USD, the FDIdisbursement rate, however, rose by 6.8 percent to stay at 9.24billion USD.
Currently, Vietnamhas totally 33,787 foreign investment projects with a combined registeredcapital of 397.89 billion USD, while the disbursed amount stood at 241.1billion USD, 60.6 percent of the committed amount./.
The countrywas up five places against last year’s ranking to reach 19thon the list, according to UN Conference on Trade and Development(UNCTAD)’s World Investment Report 2021.
Whileglobal FDI flows fell by 35 percent to 1 trillion USD amid the COVID-19 pandemic,the lowest level since 2005 and almost 20 percent lower than the 2009 troughafter the global financial crisis, the FDI in Southeast Asia, consideredan engine of global FDI growth for the past decade, contracted by 25 percent to136 billion USD, said the report.
It statedthat Vietnam remained among the three largest recipients in the regionwith a decline of only 2 percent, while the remaining two of Singapore andIndonesia suffered drops of up to 21 percent and 22 percent, respectively.
Accordingto UNCTAD, a slight decline in FDI to the country was due tosignificantly lower investment contractions in manufacturing and realtyactivities.
However,thanks to the rise in investment in electricity projects, including a 5billion USD gas-fired power plant proposed by ExxonMobil (US) and a 2.2 billionUSD coal-fired power plant developed by Thai MNEs in the Quang Tri EconomicZone, the flow of FDI was still okay.
Asinvestors, Singapore and Japan topped the list of countries andterritories having investment projects, in which Singapore’s reached 5.64billion USD, 37 percent of the total and Japan invested 2.44 billionUSD, a surge of 67 percent in investment compared to 2019.
UNCTADpointed out local measures to promote investment, including thepermission for certain disputes between foreign investors and the State to betaken to international arbitration, were keys to attract FDI inflows.
The reportalso said the Vietnamese government has expanded the list of businesslines eligible for investment incentives, along with the publishing of adetailed list of conditions applied for businesses to be considered high-techenterprises eligible for tax incentives as good points.
“Vietnam forthe first time introduced a negative list on market access, affording foreigninvestors with national treatment (NT) except in the sectors included in thatlist. The country also raised the cap on foreign ownership in domesticairlines.”
According tothe report released late June, the US continued to be the world’s largestFDI recipient, followed by China and Hong Kong (China).
UNCTADexpected global FDI flows to bottom out in 2021 and later recover some lostground, with an increase of about 10-15 percent.
The reportsaid: “This would still leave FDI some 25 percent below the 2019 level,”adding current forecasts show a further increase in 2022 when the upperbound of projections would bring FDI back to the 2019 level.
The reportconcluded: “Prospects are highly uncertain and will depend on, among otherfactors, the pace of economic recovery and the possibility of pandemicrelapses, the potential impact on FDI of recovery spending packages, and policypressures.”
Inthe first six months of 2021, the total FDI commitments to Vietnamdeclined by 2.6 percent year-on-year to 15.27 billion USD, the FDIdisbursement rate, however, rose by 6.8 percent to stay at 9.24billion USD.
Currently, Vietnamhas totally 33,787 foreign investment projects with a combined registeredcapital of 397.89 billion USD, while the disbursed amount stood at 241.1billion USD, 60.6 percent of the committed amount./.
VNA
