Of the figure, nearly US$2.4bil were poured into operating projects, with many of them increasing their capital for the second time.

Explaining this sharp increase, Dominic Scriven, Director of the Dragon Capital Fund, said Vietnam gathered all three conditions to attract investors which are a stable investment environment, potential and durability.

Phan Huu Thang, Head of the Foreign Investment Department under the Ministry of Planning and Investment, summed up five factors that contributed to this year's breakthrough in FDI.

He listed Vietnam's accession to the World Trade Organisation (WTO) that helped expand export and service markets; the political stability and rapid economic growth rates; the improvement of legal system, including the promulgation of the Laws on Investment and Enterprises; the development of infrastructure and the current trend of FDI flow into developing countries, especially those having high economic growth rates; and a favourable investment environment.

Investors from Japan ranked Vietnam in the third place, after China and India, in terms of an attractive investment environment in a recent survey conducted by the Japanese Bank for International Cooperation.

Their assessment was based on such criteria as potential for foreign business, high growth rates and low level of risks.

While industrial production still led the country in attracting FDI capital, the hi-tech field also caught the attention of foreign investors.

Experts said the Intel Group's US$1bil project in chip manufacturing would be the starting point for satellite projects in the field. Intel's project was also the focus of a hi-tech zone in HCM City.

In the northern region, Japanese investors accompanying their Prime Minister Shinzo Abe to the APEC forum in early December showed their interest in the Lang-Hoa Lac Hi-tech Zone, the Thang Long Industrial Zone of Hanoi and other IZs in neigbouring Hai Duong Province.

Thang said there are good prospects for FDI flow to exceed US$10bil in 2007, citing between 3-4 projects of the Intel project's scale that the US is having in store, as well as those by other traditional and powerful investors such as Japan, the Republic of Korea, Taiwan, Hong Kong and Singapore.

In addition, Vietnam will open door for investors in such fields as banking, telecoms, distribution-retail services, electricity and finance under its WTO commitments, paving the way for more investment to come, Thang said.

The official said, however, Vietnam still has a lot of work to do in the coming time. Infrastructure development and training of hi-quality human resources were two key issues mentioned by investors at the Business Forum held in Hanoi on Dec 13, which Vietnamese policy makers also recognised as top priorities in the coming time.

Alongside with a proper reform in education to meet increasing demands of international intergration, the Ministry of Planning and Investment (MPI) has suggested the Government to give incentives to investment in vocational training schools and businesses' training of workers.

According to Thang, the MPI will also continue administrative reform, accelerate management decentralisation, and intensify investment promotion activities.

He said the Ministry has submitted a plan to set up investment promotion offices abroad to the Government for approval, aiming to help foreign investors in entering Vietnam and Vietnamese businesses in investing abroad.

These offices will serve as contact points for investment promotion activities in foreign countries and lobby for ODA and bilateral and multilateral cooperation programmes.

Source: VNA