FDI disbursement exceeds US$20 billion
FDI disbursement exceeds US$20 billion
Foreign direct investment (FDI) disbursement reached more than US$20 billion in 2022 - the highest level in five years, aiding post-pandemic recovery.
Renewed trust
In the first 11 months of 2022, FDI disbursement reached US$19.7 billion, up 15.1 percent year-on-year. Economists forecast the sum would exceed US$20 billion or even reach US$21-22 billion by year’s end.
Nguyen Van Toan, Vice President of the Vietnam Association of Foreign Invested Enterprises, said the 11-month FDI disbursement result was impressive, especially in the context of a slowdown in registered capital.
“In my opinion, FDI disbursement is important, and FDI can contribute to the Vietnamese economy only when it is disbursed,” Toan emphasized.
Dr. Nguyen Quoc Viet, Deputy Director of the Vietnam Institute for Economic and Policy Research (VEPR) under the University of Economics and Business, Vietnam National University, Hanoi, affirmed that FDI disbursement contributed significantly to Vietnam’s economic growth in 2022.
According to Nguyen Thi Huong, Director General of the General Statistics Office of Vietnam under the Ministry of Planning and Investment, the new record of FDI disbursement shows foreign investors’ increased trust in the Vietnamese investment and business environment and their willingness to expand operations in the country.
Orientations for 2023
Despite the record set in 2022, economists believe there is still much room for Vietnam to attract additional FDI and use it more effectively to promote economic growth in 2023 and ensuing years.
Dau Anh Tuan, Director of the Legislation Department of the Vietnam Chamber of Commerce and Industry (VCCI), said that 35 years since Vietnam promulgated its Law on Foreign Investment in 1987, the country has become an attractive destination for foreign investors. In 1991, the amounts of FDI registered and disbursed in Vietnam were US$1.28 billion and US$428.5 million, respectively. In 2021, these increased respectively by 30 times and 38 times, despite the heavy impacts of the COVID-19 pandemic.
FDI companies are an important part of the Vietnamese economy, contributing about 72 percent to Vietnam’s export value, helping maintain the country’s trade surplus in recent years.
However, Vietnam has faced some problems related to FDI, such as transfer pricing and tax evasions, with some FDI companies yet to abide seriously by Vietnam’s environmental regulations.
To attract quality FDI projects in 2023 and ensuing years, VCCI recently introduced a set of tools for screening FDI projects in Vietnam. The tools include assessment of investment based on factors such as employment generation, technology transfer, infrastructure development, linkages with local businesses, labor conditions, and environmental impact. The screening tools are expected to help improve the quality and effectiveness of FDI.
