More FDI capital for sustainable development

10:39 AM @ Tuesday - 20 July, 2010
Vietnam needs to attract more “ clean foreign direct investment (FDI)” capital to meet the country’s economic development and its industrialisation and modernisation, warned experts, as there remain a number of shortcomings in this area.

According to statistics released by the Ministry of Planning and Investment (MPI)’s Foreign Investment Department, FDI in Vietnam hit 66.5 billion USD in 2008, a 3.55 increase year-on-year. FDI capital injected into the Southeast Asian nation reached more than 21 billion USD despite the global economic downturn in 2009 and this figure is expected to rise by more than 10 percent in 2010.

However, FDI has focused on the real estate sector which does not generate jobs for workers, promote the transfer of technology, production and export.

The proportion of FDI in the real estate sector accounted for more than 45.5 percent while heavy and light industries and the processing sector only accounted for 36 percent of the country’s total FDI in 2007 and 2008.

Furthermore, there remains a number of conundrums in the procedures for investing in the industry sector as there are few hi-tech investment projects. A number of projects also fail to protect the environment when using outdated technologies and overusing natural resources. This will gradually turn Vietnam into a technology rubbish dump for other countries, said experts.

Shortcomings in managerial capability and monitoring capital sources still remain and there is a very easy going attitude to receiving FDI that the World Bank has warned will affect Vietnam’s prestige in the eyes of international partners.

Regarding taking tougher measures to choose sources of FDI, the MPI said that an increase or decrease in FDI is attached to an increasing confidence in the country’s economic development, but not to attract FDI at all costs.

According to the latest research from the international consultancy firm A.T. Kearney, Vietnam ranks 12 th in the top 25 of the FDI Confidence Index 2010 while Malaysia ranks 20th, Indonesia, 21 st and Singapore, 24 th .

Head of the Institute of Economics Dr Tran Dinh Thien said that it is time for Vietnam to select investment projects that are high-quality and use the best technology as well as projects that will develop well./.

(Source: http://en.vietnamplus.vn/)

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