Vietnam remains attractive investment destination despite pandemic
Vietnam remains attractive investment destination despite pandemic
Vietnam entered the top 20 countries globally in terms of foreign direct investment (FDI) attraction in 2020. Despite the complicated developments of the Covid-19 pandemic in 2021, Vietnam remained a safe and attractive destination for foreign investors who have great expectations of the country’s long-term development.
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Mary Tarnowka, executive director of the American Chamber of Commerce (AmCham) in Vietnam, said the Covid-19 pandemic affected foreign investment in Vietnam in the past two years. In particular, the fourth wave severely affected many industrial zones nationwide, including Vietnam’s largest import-export and production centers, such as Ho Chi Minh City, and Binh Duong, Dong Nai and Bac Ninh provinces. Supply chains experienced disruptions due to labor shortages and unsuitable implementation of the “three-on-site” model - working, eating and sleeping at the worksite - and the “one route, two destinations” model. However, Vietnam is still seen as an attractive destination, as reflected in 1,134 FDI projects worth more than US$9.7 billion invested by US companies in Vietnam by November 2021, Tarnowka said.
Diversatek Vietnam is Diversatek Healthcare’s only overseas medical equipment production factory. During the fourth wave of the Covid-19 pandemic, the company doubled costs to work at half capacity due to the implementation of the “three-on-site” model. Despite the difficulties, Vietnam is still an ideal investment destination for many US companies because the Vietnamese economy is recovering strongly. Vietnam is a major economic partner of the US, partly due to the shift of supply chains out of China to seek opportunities in other markets. In this process, Vietnam features prominently on the radar, providing the country with opportunities to participate more deeply in the global supply chain.
KJ Ung, managing director of the First Solar Vietnam, said Vietnam is gradually recovering with great development potential. Therefore, the company plans to expand investment in the country with total capital of US$1 billion in order to upgrade technologies for its solar panel manufacturing facility. To maintain production and enhance competitiveness, the company hopes for easy entry of experts into the country and access to third booster shots in the near future.
Sai Ramana Ponugoti, general director of the Proctor & Gamble Vietnam, said Vietnam has implemented mass vaccinations well to control the pandemic, helping the economy recover quickly and strongly, and creating confidence for foreign investors. P&G Vietnam will continue to expand investment and turn its factory in Vietnam into a large production center to export goods around the world.
Dr. Majo George of the RMIT University Vietnam said FDI companies are seeking ways to diversify their global supply chains and reduce their dependence on China. In addition, investors are attracted by free trade agreements to which Vietnam is a signatory given their benefits. To attract more FDI companies, authorities should upgrade industrial zones, export processing zones and economic zones, in addition to promoting the training of human resources related to high-tech, digital economy, energy, infrastructure and logistics.
Investors are happy when the government listens to their thoughts and aspirations and makes adjustments suited to the situation. FDI companies are expressing their desire to expand investment in Vietnam as the country remains an attractive destination.
