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Boosting FDI disbursement: Nearly US$230 billion in Foreign Direct Investment (FDI) has not been disbursed (30/5)
30/05/2013 - 11 Lượt xem
This
is a highly feasible requirement in the context of the numerous
difficulties facing the economy, and was mentioned in a government
report presented to the National Assembly at its ongoing session in
Hanoi. While public investment is reduced, investment by state-owned
businesses decreases and investment from the private sector remains
limited, bringing FDI projects to life will be an effective solution to
create an impulse for economic recovery.
Large amounts of FDI still to be disbursed
In
1988, the Law on Foreign Investment in Vietnam came into effect and the
country attracted 37 FDI projects with total registered capital of
US$342 million. In 1990, Vietnam attracted 107 FDI projects with total
registered capital of US$735 million, meaning that it attracted one FDI
project every three days on average and the amount of capital per
project was small. But since 2007, the country attracted four FDI
projects a day on average (including projects allowed to increase their
capital) with the amount of capital per project ranging between US$10-50
million.
Statistics
from the table below show that since 2008, registered FDI in Vietnam
has revealed fluctuations although the total amount of capital attracted
each year was rather high. By April 20, 2013, 14,951 FDI projects were
ongoing in Vietnam with total registered capital of US$229.87 billion
(including capital increases). But according to the Ministry of Planning
and Investment, Vietnam disbursed just over US$100 billion during the
last 25 years. Clearly, Vietnam still has to disburse large amounts of
FDI capital.
New emerging investment destinations
Nearly
15,000 FDI projects are ongoing in Vietnam with total registered
capital of approximately US$230 billion - this is the result of great
efforts of ministries, sectors, localities and the business community.
One factor which cannot be ignored is that leaders of many provinces and
cities have applied flexible policies to turn these localities into
attractive destinations for foreign investors.
Over
the last nearly one decade, many localities in Vietnam have become
attractive destinations for foreign investors. Apart from Nghe An, Ha
Tinh and Thanh Hoa, some transnational groups have showed their interest
in exploring investment opportunities in localities such as Vinh Phuc,
Bac Ninh, Hai Duong, Hung Yen, Bac Giang and Thai Nguyen - a mountainous
province in northern Vietnam.
Thanh
Hoa Province currently ranks fifth among localities nationwide in
attracting FDI. The Nghi Son Petrochemical and Oil Refinery project in
this province recently increased its capital by US$2.8 billion, raising
the total amount of registered capital of ongoing FDI projects in Thanh
Hoa to nearly US$10 billion (in 2001, a mere 11 projects with total
capital of US$430 million were ongoing in the province). In Bac Ninh
Province, 293 FDI projects currently are underway with over US$4 billion
against three projects with US$8 million in 2001; Vinh Phuc: 148
projects with nearly US$2.5 billion against four projects with US$17
million; Thai Nguyen: 33 projects with US$2.15 billion against two
projects with US$3 million; Bac Giang: 110 projects with US$1.6 billion
against 14 projects with US$148 million. Notably, Binh Dinh, a coastal
province in the central region, recently attracted a bus manufacturing
project with registered capital amounting to US$1 billion. Currently, 53
FDI projects with US$1.7 billion are underway in this province against
nine projects with nearly US$40 million in 2001. Binh Dinh has moved up
from the 34th position (in 2001) to the 22nd position nationwide in
attracting FDI.
Vietnam
has achieved encouraging results in attracting FDI. More importantly,
FDI projects have benefited both investors and local people.
Big challenges
In
order to put FDI projects into commercial operation as soon as
possible, it requires not only foreign investor efforts, especially
capital, but also timely assistance from local authorities in terms of
site clearance and provision of infrastructure such as electricity,
water, roads and telecommunications facilities. Ensuring sufficient
human resources for FDI projects has been a big challenge for almost
every locality, requiring investors and local authorities to tightly
cooperate in training skilled workers. Other challenges are related to
worker accommodation and service facilities such as kindergartens,
schools and hospitals. All these challenges must be overcome for FDI
projects to lay their golden eggs.
In
the first four months of 2013, an estimated US$3.75 billion of FDI
capital was materialized, up nearly four percent compared with the same
period last year, according to the Foreign Investment Agency under the
Ministry of Planning and Investment. This was a positive signal compared
with a nearly five percent decrease in the amount of FDI capital
disbursed in 2012 against that of 2011. In the past, there was a time
when FDI disbursement within a year exceeded US$11 billion. Therefore,
Vietnam is looking towards the US$12 billion FDI disbursement target set
for 2013. To achieve this target, Vietnam must take appropriate
investor support solutions.
Data
from the General Statistics Office show that implemented FDI accounted
for 24.3 percent of total investment in development in 2007, 30.9
percent in 2008, 25.5 percent in 2009, 25.8 percent in 2010, 25.9
percent in 2011 and 23.3 percent in 2012. Obviously, it is necessary to
enhance the role of the FDI sector in order to improve the national
economy and effectively implement the socioeconomic development plan for
2013 with National Assembly-set targets./.
Source: VEN
Source: VEN
