Foreign direct investment (FDI) capital is presently an indispensable part of the Vietnamese economic development strategy. With its attractive investment policies, Vietnam is become a top pick of international investors. By the end of April 2009, the United States (US) is the largest FDI investor in Vietnam.
Global economic crisis caused FDI capital for Vietnam to fall in both registered and disbursed capital value. The registered amount in April was only US$342 million, down 52 per cent from March and 87 per cent from the same month of 2008. The total registered value in the first four months of 2009 was only US$6.357 billion, down 17 per cent year on year. Meanwhile, realised value dropped 32 per cent year on year in the first quarter.
Of the four-month sum, existing projects accounted for US$3.87 billion while fresh projects made up for US$2.48 billion. Real estate remained the top choice for foreign investors although the market is in the freezing period and land price has fallen by 50 per cent in some localities. However, this market still took up 91 per cent of FDI capital in the past four months. This meant that investors in Vietnam pinned high hopes on business prospects in Vietnam.
FDI for the service sector accounted for 93.8 per cent, or US$9.965 billion, in which the real estate market took up 97 per cent, or US$5.785 billion. The industrial sector attracted only US$392 million, or 6.2 per cent. The strong flow of FDI capital for real estate market is the foundation for the belief that the market will recover in the coming time.
Notably, foreign investors almost ignored agriculture, forestry and fishery in the past four months, primarily due to low investment recovery. This requires more locally sourced capital for these sectors. The investment for these sectors fell from 14.1 per cent of total social investment amount in 1999 to 6.5 per cent in 2007, much lower than the investment on GDP of 20 per cent.
In 2008, the US was the ninth largest foreign investor in Vietnam with nearly US$5 billion, followed by Taiwan, Malaysia, Japan, Singapore, South Korea, British Virgin Islands, Hong Kong and Thailand.
However, the country became the largest foreign investor with US$3.82 billion, accounting for 60 per cent of total registered capital, which was equal to total registered capital of the world’s largest economy from 1988 to 2007 (with US$3,480 million.) There are many reasons to explain the investment growth of the US in Vietnam. A primary reason is the attractiveness of Vietnam.
PV
Vietnamese
