Tin mới
Foreign investment: An important factor for economic restructuring (19/6)
19/06/2012 - 13 Lượt xem
Foreign investment promotes reform
Vietnam's economy revived quickly and passed the most severe crisis (the inflation peak of over 600 percent) occurred in the late 80s of the last century and raised strongly, set up the historic achievements in the first 20 years of reform (in the period of 1995-2005, the economic growth rate reached above seven percent per year). There are great achievements of the State and Party due to identifying the market economy and international integration; actively attracting FDI and ODA, encouraging the development of private economic sector and respecting the innovation and the arrangement of State owned businesses.
A long distance between domestic and FDI businesses
After more than 25 years of establishment and development, the FDI business sector has accounted for more than 50 percent of the industrial production value and over 50 percent of the total value of exports from Vietnam. Since the first time from 2010 to now, excluding crude oil export, the export turnover of the FDI business sector has outstripped the domestic business sector in both the growth and absolute value. In particular, this gap was just over US$1 billion in 2010, US$5.4 billion in 2011 and is expected to reach US$10 billion in 2012.
In the context of the global recession, the production and business of FDI businesses in Vietnam has constantly developed, while the market share of domestic businesses is at risk of impairment. For example, in the export of coffee, FDI businesses accounted for more than 60 percent of total volume.
It is not mentioned in other areas, such as international tourism and sea freight.
In general, Vietnamese businesses have ineffectively exploited the technology transfer from FDI. The supporting industry has virtually undeveloped and FDI in Vietnam is mainly to participate in global value chains through investment in export processing.
The slow implementation of ODA projects
One of the biggest drawbacks of FDI in Vietnam is the slow implementation. In attracting ODA since 1992, tens of billion of dollars have been disbursed through the implementation of dozens of projects in economic infrastructure system development. Thus, Vietnam has been increasingly more modern. However, the quality of some works is not good and the investment rates of Vietnam's projects excess other countries in the region. One of the main causes is the weak project organization and implementation. In addition, the modern management methods have not been studied to apply, such as public-private partnership (PPP) or the private economic sector has not been attracted to participate in the implementation of ODA projects.
The indispensability of FDI in economic restructuring
The economic restructuring has primarily focused on the restructuring of public investment, commercial banking system and State owned businesses. In the restructuring of public investment, it is necessary to accurately identify projects using the State budget and effectively implement ODA projects in the new forms of investment such as PPP as ODA now accounts for nearly 20 percent of total investment capital from the State budget. In the period 2011- 2015, ODA projects need to disburse about US$3 billion per year.
In the restructuring of commercial banking system, the private economic corporations in the process of innovation and arrangement of State owned businesses cannot avoid acquisition and mergers (M&A) method, including M&A with foreign companies. This should be defined as a new type of FDI to Vietnam.
The economic restructuring should be considered as a large project, in which external factors will play an important role. If there were no foreign investment, many projects, such as the North-South high-speed railway and the Hoa Lac high-tech park would not be implemented.
The necessary of investment incentive
Many specific requirements have been raised. For example, to effectively implement the PPP method, it is necessary to have specific and feasible legal documents. In addition, to implement the M&A between Vietnam with foreign businesses, new regulations are needed.
In the drive toward a green economy, clean and environmentally
friendly technology, high-tech projects are needed. However, it is hard
to attract foreign investors if not have specific regulations on
investment incentive. Many experts said that this is the biggest missing in Vietnam now.
Lessons from 25 years ago are shown that law on foreign investment in Vietnam at that time was assessed as the most open and clear in Asia. Therefore, Coca-Cola joined in Vietnam as soon as the law on foreign investment was born. Without foreign investment, the result of the economic restructuring is limited, since foreign investment has promoted and required reform in Vietnam./.
Source: VEN
Source: VEN
