Prospect for Higher FDI Flow

Recently, a delegation of 16 companies from the Seoul Trade Association had a meeting with Vietnamese firms. These guests are making the most of the local government’s polices in investment promotion and job creation as well as export boost. Vietnam is one of South Korea’s key partners for its investment.

 

Louis Park, head of the delegation, said Vietnam is attractive for its potential and cheap and abundant labour force. Most of the South Korean visiting guests mainly operate in import and export of light industrial products, hi-tech and consumer products. Vietnam, with population of more than 80 million people, is considered an attractive market for South Korean investors.

 

These are main factors which have maintained South Korea’s stable investment inflow over the past time. In the first five months of this year, despite impacts of the world economic slump, South Korea still stood at the 2^nd position in total registered and raised capital among foreign investors in Vietnam. If based on the number of newly-licensed projects in the period, the country ranked first with 59 projects and 11 projects with capital rise. 

 

Besides, Vietnam has recently been climbed up 9 levels to be listed among top ten countries in the ranking of 50 countries and territories with the most attractive investment environment worldwide under a report announced by A.T. Kearney, a global management consulting firm, on June 11. Vietnam was appreciated higher than Brazil, Mexico and Sri Lanka in the field of supplying informatics contracts and stands in the top groups of India, China, Malaysia and Thailand. Under the report, Vietnam was also selected in the world’s top three in terms of low production costs and low labour costs but high profit.

 

AT Kearney policy council executive director, Norbert Jorak, said foreign investors care about Vietnam not only for its areas of strength like agricultural product export.

 

"A high position in the ranking means that Vietnam will be a promising market in the years to come, especially in the context of the global economic crisis which still continues threatening many countries in the world”, Norbert Jorak said and mentioned the change in Vietnam’s investment trend.

In fact, the change in the country’s investment trend has seen since early this year. Phan Huu Thang, Head of the Ministry of Planning and Investment’s Foreign Investment Agency referred to a large influx of foreign companies to Vietnam so far this year, including those from EU, particularly from Germany, Italy, Switzerland and France. A mission of 27 businesses from (Movement of the French Enterprises (MEDEF) came to Vietnam mid-June to look for business chances. Foreign investors are still upbeat about the Vietnamese economy; meanwhile, other economies in the world are forecast to continue falling into the recession. "I have just visited Switzerland and recoganised that Swiss investors are really interested in Vietnam”, Thang added.

 

Also last month, Paul Bulcke, Managing Director of Switzerland’s Nestlé Group came to Vietnam and inaugurated Nestlé’s new plant in Bien Hoa II Industrial Park in southern Dong Nai province.

 

This is among projects in the firm’s plan to invest additional US$5 million into Vietnam announced last year. La Vie, a Vietnam-Switzerland venture with 65 percent stake held by Nestlé, has just invested additional US$6 million to raise its production capacity in the factory in southern Long An province. It has also announced to pour some US$1.3 million into its plant in the northern province of Hung Yen.

"These investments show Nestlé’s long-term investment pledge in Vietnam in particular and emerging markets in general in the context of the current economic crisis”.

 

Vietnam owns many big advantages such as young and dynamic population and favourable business environment. We hope big opportunities in Vietnam”, Bulcke said.