The recovery of foreign direct investment will continue playing a critical role in bolstering Vietnam’s economic growth in 2014.
FDI inflows are likely to increase next yearPhoto: Le Toan
According to the Foreign Investment Agency (FIA), the total new foreign direct investment (FDI) commitment to Vietnam reached $21.6 billion in 2013, up 54.5 per cent year-on-year.
This figure, however, did not yet include the expansion of investment of the British firm Technostar at Vung Ro petrochemical and oil refinery complex in the central province of Phu Yen. The company increased its investment to $3.18 billion from $1.7 billion, which would bring the total new FDI commitment in Vietnam to $23 billion.
The FDI disbursement sum in 2013 also witnessed a strong recovery with a positive rebound of 9.9 per cent, reaching $11.5 billion, in comparison with a slide of 4.9 per cent in 2012.
“We tried to improve the investment climate in 2013 and this is our position at the yea’s end,” said FIA director Do Nhat Hoang, adding that this positive result offered a bright outlook for FDI to Vietnam in 2014.
Although Hoang refused to give a specific target in 2014, he said that expectations would be higher than in 2013. Hoang referred to many significant investment projects proposed by foreign investors that were due to enter discussions for licensing next year.
Samsung is a good example. Last October it entered a memorandum of understanding (MoU) with the MPI to co-operate on priority industries, including power, urban development, airports, chemical engineering, shipbuilding and a public information and communication technology programme.
Samsung expected that the MoU would enable the group to develop detailed plans to participate in Vung Ang 3 and Quang Trach 2 power plants in the central provinces of Ha Tinh and Quang Binh. Vietnam is promoting these as part its national power development plan.
The group also plans to invest in the Long Son oil refinery and petrochemical project in the southern province of Ba Ria-Vung Tau, and study the feasibility of investing in Long Thanh international airport in the southern province of Dong Nai.
In addition, the group will co-operate with the state-run Shipbuilding Industry Corporation (SBIC), formerly known as Vinashin, to help this shipbuilder to restructure after falling into financial trouble in 2011. It will also partner with a Vietnamese firm to study the feasibility of investing in property in Hanoi.
Presently, South Korea, Japan and Singapore are the main sources of FDI in Vietnam, but the ANZ Banking Group, in a report released early last month, forecast there would be more FDI inflows from Taiwan in the medium-term.
According to the General Statistics Office, foreign invested companies contributed 20 per cent to Vietnam’s gross domestic product (GDP) and accounted for two thirds of the nation’s export turnover in 2013.
“Many people are afraid of the economy’s dependence upon FDI firms, but I think they are part of the economy and foreign companies in Vietnam should be treated fairly,” said Nguyen Bich Lam, general director of General Statistics Office.