In the social-economic development plan from 2006 to 2010, the goal of Vietnam is attracting around $150 billion of capital, 35% of which is from outside. The disbursed foreign direct investment (FDI) capital in this period must be between $25-30 billion. Thus, Vietnam needs to disburse around $6 billion annually during this time.

The FDI flow into the country has recovered since 2004, after the financial crisis in Asia in 1997. In 2004, registered FDI capital was $4.5 billion. It increased to $6.8 billion in 2005, $12 billion in 2006 and is expected to reach $13 billion in 2007.

Disbursed FDI capital also increased along with the rise of registered FDI capital. However, it is still under expectations and the goal of Vietnam.

In 2006, though the disbursed FDI capital was $4.1 billion and it is forecast to be $4.5 billion this year, it is lower than the set targets for both years. To fulfill the goal for 2006-2010, in the next three years, the volume of disbursed FDI capital must be much higher than that of 2006 and 2007.

Recently the Foreign Investment Department under the Ministry of Planning and Investment released a report which says that the list of large-scale projects that are being promoted in Vietnam is getting longer and the volume of capital is also on the increase.

In early 2007, the list of foreign-invested projects being promoted had total capital of $20 billion, which rose to $35 billion in mid 2007 and now the list contains 50 projects totalling $50 billion of capital. Among them are very big projects, such as the $5 billion one to build hi-tech parks of Taiwan’s Foxconn group.

Foreign investors have expanded the scale of investment, with Foxconn’s $5 billion project as an example, while the total capital of the ten largest FDI projects in 2006 was just $4 billion.

In the January-July period of 2007, the number of large-sized projects licenced grew by over 50% year on year. The average capital for a FDI project in this period was $8.8 million compared to $7.01 million in the same period of 2006.

The 48 projects with $50 billion of capital that are queuing to enter Vietnam is good news but the money is still outside of Vietnam’s border.

$50 billion is a huge number but it is not the real capital that Vietnam will receive. It just shows the great opportunity for the Vietnamese economy.

Vietnam is like a nice house that many people want to visit. Visitors – investors – are asking the way to the house and they are now standing at its door. However, whether these visitors enter the house and stay there or not, depends on the host – Vietnam.

An official of the Foreign Investment Agency said: “We have to welcome guests respectfully. However, we have to carefully consider them and their ability.”

It is impossible to licence all 48 projects. Licencing 30/48 waiting projects is considered a success of Vietnam. In the next two years, total registered FDI capital of $30 billion is a high target for Vietnam.

Of the 48 waiting projects, Vietnam will have to consider choosing the most suitable ones, appropriate to the country’s development policies and requirements.

The country is thirsty for capital. Investors with huge potentials are standing at the door. Vietnam’s urgent task is preparing to welcome those investors.

The first thing is speeding up licencing and implementation procedures to turn those projects into reality. The second thing is improving infrastructure facilities to meet the requirements of investors.

Preparing to welcome foreign investors and to end the country’s thirst for capital is not the task of only the Ministry of Planning and Investment, but all ministries, sectors and provinces in Vietnam.

Source: VietnamNet.