Foreign Investors Bearing 20 per cent Cost Growth in Vietnam
Foreign investors are crying that they are suffering a 20 per cent growth rate of production costs due to galloping inflation, which heated the EuroCham conference on March 20, the local Youth newspaper said.
Jagdeesh M.Mehta, CEO-Chairman of Essar Vietnam the inflation rate is too high, sending the production costs to rise 20 per cent now amid shortage of high-skilled labor force and procedural hurdles putting cap on hiring overseas manpower.
Foreign-invested projects in Vietnam have recently faced stagnancy, and only 3 per cent of which is implemented, Jagdeesh M.Mehta noted.
Meanwhile, Alain Cany said Vietnam is facing double problems: soaring inflation and forex rates, which are hurting foreign investors.
The advantage of low-cost still has no teeth because of recent salaries hikes. Mar Van Den Assem, member of EuroCham noted it is difficult to put a young Vietnamese person to the executive post.
Walter Blocker, vice chairman of the U.S. Commerce Office in Asia-Pacific Region proposed Vietnam should nurture a cradle to train young talents, which are competitive enough against rivals coming from China and India.
In contrast, Phan Huu Thang, head of Foreign Investment Department under the Ministry of Planning and Investment was still optimistic and noted no signal proving that foreign investment influx were slowing down.
Alain Cany noted the current situation in Vietnam is short-term and remains attractive in the long-term. Vietnam is still ranking the world’s sixth most attractive destination.
Vietnam attracted US$2.65 billion of FDI between January and February, representing an on-year rise of 39 per cent, according to the Ministry of Planning and Investment (MPI).
(Youth)
Vietnamese
