Vietnam’s disbursed foreign direct investment is forecast to exceed $11 billion in 2008 if barriers continue to be lifted for facilitating additional inflows.
Hanoi, Ho Chi Minh City, Binh Duong, Dong Nai and Ba Ria-Vung Tau remain the country’s top foreign direct investment (FDI) magnets, making up almost 40 per cent of the disbursement stock.
The remarkable forecast came together with the Foreign Investment Agency (FIA) anticipating to grab $50 billion in newly pledged funds as more large-scale projects are expectedly approved before the close of the year.
“Given the decentralisation of FDI activities in accordance with the Investment Law passed in 2005, local governments have done a good job of attracting and accelerating FDI project implementation, resulting in sharp rises of the inflows since then,” said Cao Viet Sinh, Deputy Minister of Planning and Investment (MPI) at last week’s meeting to build FDI attraction plans for next year.
FIA figures show that Vietnam’s newly pledged and expanded FDI capital was $12 billion in 2006 and $21.3 billion in 2007. The new fund reached $45.3 billion in the first seven months of this year. Together with these, the disbursement fund increased drastically from $4.6 billion in 2006 to $8 billion in 2007. The first seven months of 2008 saw $6 billion in implementation capital.
“Challenges are how Vietnam will facilitate foreign investors to deliver all of their promises,” Sinh said, admitting that infrastructure weaknesses were hampering implementation of new FDI projects whilst strikes were hitting operating foreign invested enterprises.
Noticeably, the implementation of five port projects at Ba Ria-Vung Tau’s Cai Mep-Thi Vai area, with combined investment capital of $1.7 billion, has been delayed as a result of lacking port-related infrastructure facilities.
“Port developers plan to open their terminals in 2009 while construction of related infrastructure can be completed at least one year later,” said a FIA official. The Ministry of Labour, War Invalid and Social Affairs reported 500 strikes across the nation between January and July this year.
Hanoi and Bac Ninh saw a surge in labour disputes at foreign-invested enterprises (FIEs) in June and July this year. Local workers at FIEs now enjoy $45, $50 and $55 in monthly minimum salaries depending on the enterprise locations, recognised as the lowest levels in the region. (Source: VIR)