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Improved investment environment attracts investors

Saturday - 03/12/2016 14:29
Multi-billion-US$ FDI projects have been registered in Vietnam since the beginning of the year, and the number of these projects continues to increase.
Improved investment environment attracts investors
This trend underlines that the current investment environment in Vietnam is fairly attractive to foreign investors.
However, according to economist Pham Chi Lan, Vietnam should not be satisfied with the increased number of recently registered US$ billion FDI projects as it is not enough to prove that the Vietnamese investment environment is really attractive for foreign investors and that they are entirely confident in the investment environment in Vietnam.
She clearly expressed her anxiety at the annual Consultative Group (CG) Meetings for Vietnam where problems of macroeconomic instability, low labor quality, outdated infrastructure, backward administrative procedures, and slow site clearance are often referred to by international investors as major obstacles adversely affecting the investment environment in Vietnam. Other economic experts at the meeting shared her viewpoint and agreed that Vietnam would face difficulties in attracting FDI without effective measures to overcome these obstacles.
“Foreign investment trends are changing and Vietnam’s previous advantages such as cheap labor, abundant natural resources, and large market do not amount too much now. Moreover, there is stiff competition in attracting FDI among Asian countries, including Myanmar, Singapore, and Thailand, and Vietnam. So Vietnam should rapidly improve its investment environment so as to successfully compete with these countries,” Pham Chi Lan reiterated.
One of the major obstacles to attracting FDI into Vietnam is slow site clearance. Many agreed FDI projects encountered this problem, resulting in a failure to disburse. For example, India-based Tata Steel invested in a US$5 billion steel project in Ha Tinh Province that has been expanded for almost six years since 2007 but the local government and investor have not reach a consensus in the site clearance cost.
Recently, Samsung invested in a US$2 billion project in Thai Nguyen Province, which already received a certificate in March 2013, but has still faced difficulties in site clearance in eight of 160ha covered by the project.
“Many foreign investors see Vietnam as an attractive investment destination and have brought projects to Vietnam worth billions of US$; however, if the domestic investment environment ceases to continue improving, these multi-billion-US$ investors will change their mind and refuse to stay here any longer,” economic expert Pham Chi Lan stressed.
A report from the Ministry of Planning and Investment’s Foreign Investment Department shows an increased number of FDI projects in Vietnam during the first four months of this year including the Republic of Korea-based Samsung Electronics invested US$2 billion project in Thai Nguyen Province for the manufacturing and assembly of electronic products; the US$1 billion Russia-based Bus Industrial Center project to build a bus assembly and spare parts production plant in Binh Dinh Province; Japan-based JGC Vietnam invested US$9 billion oil refinery in Nghi Son Economic Zone in Thanh Hoa Province.
Meanwhile, Thai investors are researching a US$28.7 billion petrochemical project in Binh Dinh Province; investors in the Vung Ro Oil Refinery have planned to increase their investment from US$1.7 billion to US$3.6 billion; and Samsung planned to add US$1 billion into its plant in Bac Ninh Province.

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