Last updated: Thursday, May 23, 2013
Foreign Investment Attraction: Hopes RemainPosted: Tuesday, May 08, 2012
If evaluated in a calm and comprehensive way, the attraction of Foreign Direct Investment (FDI) still has many “bright doors”. It is not a smart way to look at the registered capital amount of a month or even a quarter to be cheerful or frightened. “These figures can quickly change,” says Mr Phan Huu Thang, Director of Foreign Investment Research Centre, when mentioning the dramatic reduction in this capital flow from early this year to April 2012 statistics term.
Quantity does not matter
Facts have shown that his statement is correct. In the last week of April, there were more large projects licensed, which created a new image for the foreign investment picture. On 24 April, Bac Giang Province People’s Committee granted the revised investment certificate to Wintek Vietnam Limited Company (100 percent of Taiwan - China investment capital).
One day earlier, on 23 April 2012, Hai Phong City People’s Committee granted the investment certificate of constructing a pharmaceutical products and medical equipment manufacturing to Nipro Pharma Group (Japan) with total investment capital of US$250 million.
The spectacular change in the short-term statistics once happened early this year. Regarding the deep concern about the drop of registered FDI in the first months of the year, right after the Lunar New Year, the registered capital witnessed a significant increase since a lot of Asian investors waited until the year of Dragon to kick-start their projects in order to gain luck!
It is similar in the case of a locality. Accurate assessment of investment attraction results cannot be made in a short term. After announcement of the worrying results of local FDI attraction in Quarter I 2012, according to the information source from Hanoi City People’s Committee in the recent meeting week, Hanoi is concentrating on accelerating examination and verification with a view to granting investment certificates to a series of projects.
Some projects can be named here, including the project of Vietnam-Russia Telecommunications Joint Stock Company (US$357 million), Trade centre and Housing project (US$79 million), Metro Cash&Carry Ha Dong project (US$24 million); Motorbike and Automobile Spare Parts project of Goshi Limited Company and Standley Electricity Limited Company (an increase of US$15 million in investment capital).
There are also quite a few concerns about the fact that “foreign investors in FDI real estate projects in Hanoi are fleeing”. However, Mr Nguyen Van Tu, Deputy Director of Hanoi Planning and Investment Department, says that there are 16 foreign invested realty projects on the area which have completed procedures for transferring capital. In general, there is not much difference between the number of investors withdrawing from the market and new comers. This is a normal move in business.
Another note from experts at Foreign Investment Agency, there remains an amount of registered FDI of US$108 billion waiting to be disbursed. With current disbursement pace, it will take four or five years for the market to absorb the registered FDI amount.
Lots of investors are seeking opportunities
Meanwhile, many big investors still express their special interest in Vietnam market. Returning from the signing ceremony for cooperation and development of the Supporting Industrial Park in Southern Hanoi (HANSSIP) with Shimizu Construction Group of Japan last March, Mr Nguyen Hoang, Chairman and General Director of N&G Investment and Development Joint Stock Company, stated that “The investment wave from Japan is being very strong.” This entrepreneur shares that there are 214,000 SMEs of Japan operating in the manufacturing sector which have never made investment overseas, especially those located in the area which was recently devastated. They all wish to seek investment opportunities in Vietnam.
In the last week of April, on the official visit of Singapore’s President, Tony Tan Keng Yam, the Vietnam Singapore Industrial Park Joint Venture Company (VSIP) was presented with an investment certificate for its project of investing in and trading of industrial park infrastructure (located in the planning area of greater Dung Quat Economic Zone). VSIP was also granted with an in-principle approval from Quang Ngai Authority to develop the Residential – Commerce – Service Complex in Son Tinh district and Quang Ngai city. These projects will help stimulate further investments from other investors.
Other regional economies also promise to pour capital into Vietnam market. According to Mr Nguyen Thanh Hung, Commercial Counsellor of Vietnam in Thailand, after the historic flood at the end of 2011, Thailand investors (SCG, Amata Group and 4 Oranges Company, etc.) are strongly shifting their investment overseas in order to reduce risk and seek for opportunities.
However, foreign investment attraction can hardly completely rely on available advantages. Mr Nguyen Xuan Trung from the Science and Society Institute of Vietnam emphasizes that so as to enhance competitiveness in attracting this capital flow, the most important factor is to establish transparent policy making mechanism; strictly abide by intellectual property rights; develop comprehensive infrastructure system and provide high quality human resources.
If these requirements are met, there is no reason that Vietnam cannot hope for better achievements.