(VOVworld) - Foreign direct investment companies play a key role in Vietnam’s economic development. Over the past 25 years, FDI has become an important source of financial supplementation to the total social investment capital, boosting the economic restructuring. VOV’s Le Phuong reports:

PM Nguyen Tan Dung, Minister of Planning and Investment Bui Quang Vinh chair the national conference on reviewing 25-year attraction of foreign direct investment in Hanoi on March 27, 2013 (Photo: VGP)

According to the Ministry of Planning and Investment, Vietnam has attracted 14,550 foreign direct investment (FDI) projects worth 211 billion USD for over the past 25 years. Since Vietnam opened its door to FDI, it has added 25% to the total social investment capital and boosted economic restructuring. Vietnam’s FDI has grown faster than its GDP. Last year alone, FDI contributed 3.7 billion USD to the state budget - 11.9% of the total. In addition, FDI enterprises have generated more than 2 million direct jobs and 4 million indirect jobs, giving a strong boost to Vietnam’s labor restructuring toward industrialization and modernization. FDI capital has been the key contributor to Vietnam’s export turnover, 64% by the end of last year. Minister of Planning and Investment Bui Quang Vinh said last Wednesday at a meeting to review 25 years of FDI attraction ‘FDI played an important role in Vietnam’s development over the past 25 years. On top of attracting investment resources, generating jobs, contributing to exports and the state budget, we can learn many things about business management, operations, and technological transfer through foreign investors.’

FDI has created opportunities for Vietnam’s provinces, especially the economic hubs. Recently, Hai Phong City and northern provinces like Thai Nguyen, Vinh Phuc, and Hai Duong have led in FDI attraction. Last year, Hai Phong city lured 1.23 billion USD in FDI revenue, ranking second in the country. Hai Phong has many advantages in industry. FDI projects in the industrial sector accounted for 64.1 percent of total projects and 98.9 percent of total investment capital in Hai Phong last year. Among FDI projects in the industrial sector, were several relatively large projects, such as Japanese Bridgestone Corporation’s project with total investment capital of 575 million USD, Nipro Pharma Corporation’s project to produce high standard medicines with total investment capital of 250 million USD, and Fuji Xerox’s project to produce printers and copiers with total investment capital of 119 million USD. These are high-tech projects with no environmental pollution. Kyoshiro Ichikawa, President of IBC Vietnam, said ‘Human resources are what Japanese enterprises are interested in most in Vietnam, as it has many professionals and young laborers. Second, Vietnam has a stable political system with few changes in leadership. Thirdly, Vietnam’s political and geographical position is at the centre of ASEAN.’

Ground-breaking ceremony of Bridgestone Vietnam’s factory to manufacture tires in Dinh Vu Industrial Park, Hai Phong City (Photo: techftc.com)

Duong Anh Dien, Chairman of Hai Phong’s People’s Committee, said the policies of provinces are designed to attract FDI. He added ‘We have outlined a detailed plan and strategy for FDI attraction. We have a staff who are proficient in English as well as profoundly knowledgeable about economic management. We have paid much attention to administrative reforms, infrastructure, and land clearance to prepare for new investment. We try to draw major investors to attract smaller ones.’

Over the past 25 years, FDI flows have improved Vietnam’s economic outlook and aided its integration process. But there remain many shortcomings that Vietnam must overcome to maximize its internal strength and create reliability for foreign investors. Prime Minister Nguyen Tan Dung said at the review meeting ‘We should speed up administrative reforms, and adopt investment creating more convenient conditions and higher competitiveness than other countries in the region.’

2013 will be said a difficult year for many countries but Vietnam will be an increasingly favoured and reliable destination for foreign investors. PM Dung pledged to work with foreign investors for mutual benefit.

Le Phuong