The Hanoitimes - Experts said that it is time for Vietnam to adopt a completely new foreign direct investment (FDI) attraction strategy in accordance with the new situation in order to boost the effectiveness and spillover effect of FDI in the future.
Despite the negative indications in the beginning of the year, including the unilateral withdrawal of the US from the Trans-Pacific Partnership (TPP) and growing protectionism in many countries, Vietnam’s FDI attraction in 2017 achieved impressive results.
Total FDI pledges reached US$35.88 billion in 2017, up 44.4% compared to 2016 which is the highest increase over the past ten years. FDI disbursement also surpassed the record set in 2016 (US$15.8 billion) to hit US$17.5 billion, Foreign Investment Agency under the Ministry of Planning and Investment said.
Moreover, FDI made significant contributions to exports, accounting for nearly 72% of Vietnam's total export revenue in 2017 and helping Vietnam's export revenue increase by 21.1% compared to 2016, the highest growth in many years.
The quality and effectiveness of FDI projects were also improved with many large-scale projects investing in the manufacturing industry, making considerable contributions to surpassing the economic growth rate of 6.7% for the whole of 2017.
2017 also witnessed large projects by giant multinational corporations including Samsung, Bosch and Panasonic in the area of research and development which is considered a gateway to gaining better access to the fourth industrial revolution, according to Prof. Dr. Nguyen Mai, chairman of Vietnam's Association of Foreign Invested Enterprises (VAFIE).
If FDI attraction only focuses on the volume of capital, it will result in negative consequences including the destruction of the environment, exhausted natural resources and restrained economic development. Amid these challenges, experts advise that it is time to shape new directions and policies on FDI attraction, under which Vietnam would be able to quickly keep pace with the considerable changes caused by the Industry 4.0.
In addition, it is advisable to revise the whole process of a FDI project including investment promotion, project appraisal, licensing, and project implementation and evaluation.
Opportunities for multinational corporations to invest in Vietnam will be expanded if Vietnam's investment promotion becomes more specific but not over-diversified as at present. The appraisal of FDI projects also needs to be changed in respect of the long-term interests of the country to provide sustainable values for Vietnam in the future.