Solutions for maintaining Vietnam s position as a bright spot for foreign direct investment

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Positive trends

According to Mr. Do Nhat Hoang, Director of the Foreign Investment Agency (Ministry of Planning and Investment), in Q1/2024, over 6.17 billion USD of foreign investment was registered in Vietnam, marking a 13.4% increase compared to the same period in 2023. Of this, newly registered capital was more than 4.77 billion USD, up 57.9% from last year. The sharp increase in the number of projects and the emergence of large-scale projects are among the main drivers of the robust growth in foreign investment. This includes many significant projects in energy sectors, such as battery production, photovoltaic cells, silicon bars, and projects producing components, electronic products, and high value-added products such as: the 120 million USD project by Boviet Hai Duong, specializing in solar photovoltaic panels; the 454 million USD project by Trina Solar Cell in Thai Nguyen; or the 275 million USD project by Gokin Solar Hai Ha Vietnam in Quang Ninh… According to Ms. Phi Thi Huong Nga, Director of the Industrial Statistics and Construction Department (General Statistics Office), this result has reaffirmed the trust of investors in Vietnam’s investment environment and continues to lead to new investment decisions and expansion of existing projects in Vietnam.

“FDI attraction is one of the highlights contributing to the positive economic outcomes of the first quarter, setting a favorable stage for 2024. This is the most evident demonstration of the FDI business community’s support and trust in the policies, solutions of the Government, the Prime Minister during the past period,” Ms. Nga emphasized.

However, the foreign business community still believes that the investment environment in Vietnam, despite its advantages such as political stability and an improving quality of the labor force, still shows several areas needing improvement in the coming period, these issues are evident through cumbersome administrative procedures; investment attraction policies are subject to changes and the supply chain is not yet perfected.

Vietnam textile and garment strives to increase the localization rate
Attracting FDI remains one of the bright spots contributing to the positive economic outcomes of the first quarter. Photo: H.Diu

Maintaining a stable investment environment

Assessing the investment environment in Vietnam over the past period, Prof.Dr. Nguyen Mai, Chairman of the Foreign Investment Business Association, stated that sectors needing priority in attraction to create breakthrough developments in Vietnam such as high technology, innovation, energy… still lack appropriate mechanisms for investment attraction. Although some preferential investment policies have been issued, the outcomes have not met expectations. Particularly, the shortage of labor and local raw materials in some industries, localities have not been fully addressed, leading to risks of disruption, local supply chain breaks in the short term. Therefore, to effectively attract FDI, four solutions need to be implemented, with the top priority still being the perfection of institutions, laws. Accompanying this, is the enforcement of institutions, policies, linked with decentralization, empowerment, individualization of responsibilities, and emphasizing the responsibility of leaders.

From a local perspective, Mr. Tran Tuan Anh, Deputy Head of the Management Board of Industrial Zones and Export Processing Zones Hanoi, stated that Hanoi aims to establish 2 to 5 new industrial zones by 2025, creating clean land to attract investment projects. The city will prioritize selective investment attraction; among them, priority is given to receiving high technology projects, clean technology, environmentally friendly with high commercial value products to participate in the global value chain, global supply chain. According to Mr. Mai Son, Permanent Vice Chairman of Bac Giang Provincial People’s Committee, Bac Giang will continue to persistently implement solutions to improve the investment and business environment, attract investment, and timely remove bottlenecks, barriers for businesses, investors.

To attract FDI effectively, Minister of Planning and Investment Nguyen Chi Dung believes that this year, it is necessary to maintain the stability of the investment environment. Simultaneously, select potential investors in key sectors such as high technology, information technology, high-quality services. To increase the attraction of foreign investment in the future, Vietnam will continue to review, adjust foreign investment policies in line with global investment trends; in which, special attention is given to industries, sectors that can contribute to the greening of the economy, energy transition, green growth, digital transformation…

Moreover, the Government continues to reform administrative procedures, especially in the implementation of procedures following the investment registration certificate such as: land, construction, fire prevention, environment, customs… Simultaneously, accelerate the linkage training of human resources according to the needs of businesses as well as anticipate trends to train human resources to meet the investment attraction needs in the field of high technology, advanced technology in the coming time.

“Localities need to be ready with necessary conditions regarding infrastructure, clean land, energy, human resources to attract large investment projects, truly meaningful for economic – social development. Along with that, accelerate the progress of public investment projects, especially projects in the field of traffic infrastructure to meet the requirements of investors,” emphasized Minister Nguyen Chi Dung.

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