Phan Huu Thang, director of the Foreign Investment Office, said five more major foreign projects, including a $6 billion oil refinery, would be licensed by the end of this month.

Investments worth nearly $20.3 billion were pledged last year but only $4.6 billion has been actually disbursed.

Planning and Investment Ministry officials said the government is working to improve this to $1 billion per month this year.

“[It] is our top priority this year,” Thang said.

The $6.2 billion Nghi Son Oil Refinery, a joint venture between PetroVietnam, which holds a 25.1 percent stake, and three Japanese and Kuwaiti partners, is the second largest foreign direct investment licensed this year.

Taiwanese industrial giant Formosa Plastics plans to invest $7.87 billion in building the country’s largest steel mill in Vung Ang in the central Ha Tinh Province.

The project was licensed last week.

Thang said considerable investment would continue to pour in from North America, Europe and

Japan though the economy was facing “temporary difficulties.”

Inflation hit 25 percent year-on-year last month, pinching incomes and forcing many workers to strike for higher wages.

But many of the strengths that attracted foreign investors in the first place remain intact.

Half of the country’s 86 million citizens are aged under 30.

Factory workers are paid as little as $50 a month for a 48-hour week, including Saturdays.

Many provinces waive corporate tax for foreign investors for the first four years, and impose half the usual rate of 10 percent for the next several years.

“The longer-term economic reform story that made Vietnam such an attractive destination for foreign direct investment in recent years remains a compelling one,” the IMF’s Benedict Bingham told a forum in Hanoi early this month.

Thang said the Planning and Investment Ministry recently organized two investment promotion events in Tokyo and Osaka.

“Japanese are very careful in making investment decisions but I did not see any reluctance during the meetings.

“We will soon attract their investments in high technologies.”

The country is becoming a promising destination for more high-tech investors, he said.

A Vietnamese-Taiwanese joint venture last week got the green light for investing $1.25 billion in developing the Thu Thiem Software Park in Ho Chi Minh City.

The investors aim to develop software for export, design circuits and chips, build infrastructure, commercial centers, offices and apartments for lease, train human resources and promote trade and investment.

The Taiwanese partner is Teco Group, which developed the $3.5 billion Nankang Software Park in Taiwan, according to the Vietnamese partner, telecom firm Saigon Tel.

But a recent survey by the Japan External Trade Organization found that Japanese enterprises have become less satisfied with the investment environment in Vietnam.

With its approval rate dropping from 75.4 percent in 2006 to 41.7 percent last year, the country has fallen from first to fifth place among six Southeast Asian destinations that have attracted Japanese investments.

Respondents were most concerned about the dearth of component manufacture, poor infrastructure for transport, communication and power, and red tape.

Thang said the government is working with local administrations to resolve these issues.

Source: TN, agency