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Vietnam an attractive destination for foreign investors
Vietnam an attractive destination for foreign investors
17/7/14
After
China’s illegal deployment
of its oil rig Haiyang Shiyou - 981 in Viet Nam’s
exclusive economic zone and continental shelf, spontaneous demonstrations
happened in some provinces, some foreign businesses’ property and estates was
destroyed by extremists, there has been a feat that Vietnam’s investment environment
has been affected and will decrease sharply. However, the macro-economy has
stabilized; inflation has been curbed; exports turnover increased more than 20%
in 2011-2013; foreign reserves sharply rose; bad debts have been controlled.
So
why? How can we maintain our economy’s safety and attraction?
In my opinion, attracting foreign direct investment (FDI) has always been a key part of Vietnam’s external economic affairs. Vietnam already has many comparative advantages and a strong investment climate, but we are working hard to become even more appealing to foreign investors. We are doing so by vigorously renovating the business and investment environment, and by recognizing that the FDI sector is an integral part of the economy – essential to restructuring the economy and raising national competitiveness.
As of last month, there were more than 16,300 active FDI projects in Vietnam that have collectively pulled in a total of $238 billion. These investors came from 100 countries and territories, and many of them are some of the world’s leading multinational corporations. In 2013, FDI inflow exceeded $22 billion, an increase of more than 35% from 2012. The figures indicate that Vietnam has become a destination of choice for foreign investors.
So what explains this Vietnamese success story?
First, Vietnam has been securing socio-political stability, and is known to be one of the most dynamic economies. Economic growth between 1991 and 2010 averaged 7.5% each year and, despite the many difficulties the country faced between 2011 and 2013, GDP growth still rose by 5.6%. Several international forecasts suggest that this trend will continue in 2014-2015 and beyond.
Second, Vietnam is now in a period of golden population structure 60% of its population are working age. It also has a favorable geographical location right at the heart of East Asia – home to a number of large and vibrant economies. Furthermore, the country is a market economy, a member of the WTO, and a party to multiple frameworks for international economic integration, including free trade agreements with partners both within and outside the region. In particular, the country is part of the Trans-Pacific Partnership negotiations. These factors all go some way to explaining why so many choose to invest in Vietnam – and should draw in more foreign investors.
Third, the Vietnamese government is committed to creating a fair and attractive business environment for foreign investors, and constantly improving its legal framework and institutions related to business and investment. The government has been working hard on restructuring the economy and its model for growth, as well as enhancing national competitiveness.
To add new chapters to this success story, the Vietnamese government is continuing to revitalize its business and investment climate. One way it is doing this is its work on three “strategic breakthroughs”: putting in place market economy institutions and a legal framework; building an advanced and integrated infrastructure, particularly transport; and developing a quality workforce. These should all be completed by 2020.
The government remains determined to fulfill its treaty obligations and promote the negotiation and conclusion of a new generation of free trade agreements. Vietnam views the success of FDI enterprises as its own success. As such, the government is committed to ensuring a stable socio-political environment, protecting the legitimate rights and interests of investors, and creating an enabling environment for FDI enterprises in the country.
In the medium and long term, Vietnam will continue in its efforts to attract and efficiently use FDI inflows to advance socio-economic development. The country will target “high quality” FDI inflows, focusing on FDI projects that use advanced and environmentally friendly technologies, and use natural resources in a sustainable way. It will also target projects with competitive products that could be part of the global production network and value chain.
International forecasts suggest that as the world economy recovers, FDI flows are returning to dynamic economies. Given the positive prospects for both global and regional economies, we are confident Vietnam will continue to find success in this area./.
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All comments [ 10 ]
Vietnam initiated economic renovation in 1986, shifting from the centrally-planned economy with state subsidies to a socialist-oriented market economy in implementation of industrialization, modernization of the country, diversification and multilateral development of economic external relations for an open–door, world integration policy.
Much of the FDI inflows into Vietnam come from more developed Asian countries, including Japan, Singapore and Korea
We see further evidence of Vietnam ‘s competitiveness in its ability to attract FDI – which at an average rate of 8.3% of GDP in the last five years (2008-2012) is among the highest rates in the whole of the global frontier and emerging Asian space.
Foreign Direct Investment in Vietnam averaged 2190.89 USD Million from 2012 until 2013, reaching an all time high of 2450 USD Million in the fourth quarter of 2013 and a record low of 1780 USD Million in the first quarter of 2012
The future is looking brighter for Vietnam as the country begins the Year of the Horse
Exports, especially foreign-invested manufacturing firms, will provide a boost to Vietnam’s growth in 2014.
International manufacturers and investors are attracted to Vietnam’s low-cost labor pool and large domestic market … they are showing sustained investment interest in the country, despite structural challenges to the economy
Vietnam’s wage levels are a lot lower than elsewhere in Asia. According to a JETRO report, monthly pay for general workers in Vietnam is roughly 32 percent of levels in China, 43 percent in Malaysia and Thailand and 62 percent in Indonesia
The recovery of foreign direct investment will continue playing a critical role in bolstering Vietnam’s economic growth in 2014.
Vietnam remains an attractive and potential destination for foreign investors
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