Foreign investment declines sharply

Foreign investment declines sharply

Foreign direct investment has decreased sharply, figures released recently by the Ministry of Planning and Investment show.

In the first seven months of this year, foreign projects worth a mere $8.03 billion were licensed, representing a fall of 33 per cent year-on-year.

Meanwhile, an Asian Economic Integration Monitor report released by the Asian Development Bank in late July says that FDI in 13 out of 15 East and Southeast Asian economies was on the rise despite the global economic downturn.

But [Viet Nam's] FDI figures still show cause for optimism, Do Nhat Hoang, head of the ministry's Foreign Investment Agency said.

Actual FDI disbursement in the first seven months was worth $6.25 billion, or 99.2 per cent of last year's figures.

Hoang said this was the real money channelled into the economy, which fueled socio-economic development.

"The stable rate of FDI disbursement is a good sign for the country's economy, especially at a time of global economic turmoil," Sai Gon Giai Phong (Liberated Sai Gon) newspaper quoted him as saying.

The sharp capital expansion in July by existing foreign firms, amounting to $1.2 billion, also showed that they were operating efficiently, he pointed out.

In the past, fresh investment in existing FDI projects was much smaller, he said.

But this rose from $1.7 billion (out of a total investment of $17.2 billion) in 2010 to $3.1 billion (out of $11.56 billion) last year.

The latest trade figures for the FDI sector also show healthy signs. In the first seven months its exports, including of oil and gas, topped $39 billion, a year-on-year increase of 36.6 per cent and accounting for 62 per cent of the country's total exports.

Prof Nguyen Mai, chairman of the FDI Enterprises Association, said despite difficulties Viet Nam has prepared for negotiations with the European Union for a Free Trade Agreement that would help attract more FDI, especially from major firms, into the country.

The improving relationship with the US was also providing an impetus to Viet Nam's FDI quest from the world's largest economy, he said.

Deputy Prime Minister Hoang Trung Hai has ordered the MPI to draft a decree on a list of sectors and areas to get priority in investment.

The new decree is expected to replace the priority list currently in force and preclude the need for investors to "ask Government agencies about priority areas."

vietnamnews