FDI attraction booms with 23 billion USD

Although the macro economy is temporily facing difficulties, foreign investors are still flockeing to Viet Nam. The country expectes to attract 23 billion USD of foreign direct investment (FDI) in the first six months this year.

2007 was seen as a successful year for FDI attraction with 20.3 billion USD, but that number has been left far behind and Viet Nam is now striving to disburse FDI capital inflow of 1 billion USD per month.

“Nankang of Viet Nam”

The Thu Thiem Software Park project capitalized with 1.25 billion USD by Saigon Tel, a member of Saigon Investment Group (SGI) and TA Associates International, Pte Ltd Co from Singapore, a member of Teco Group in Taiwan will be licensed by Ho Chi Minh’s People Committee. On a site of nearly 16 hectares along the east – west avenue of the Thu Thiem new urban area, the project will be built into a software processing city for export to design chips and train human resources in the hi-tech field, with an expected turnover of more than 6 billion USD per annum.

Apart from the initial 1.25 billion USD, the project is expected to attract an additional 2.95 billion USD from foreign and domestic investors.

“Our partner, Teco Group is managing the Nankang software center with total capital of 3.5 billion USD, earning annual turnover of 10 billion USD. Nankang is considered one of the three largest software projects in the world. Nankang’s successful experience and Teco’s reputation will help attract investment into the Thu Thiem Software Park,” said Mr. Dang Thanh Tam, President of SGI Group.

More “cautious” investors

This week, 14 US companies in many fields led by an assistant to the US trade minister will visit Viet Nam to seek business and investment opportunities. This is the third big business group from the US coming to Viet Nam since early this year.

“Small and medium-sized companies following big companies showed that US investors hail Vietnam’s business environment. Small companies are usually cautious and afraid of risk, thus the trip to Viet Nam proved their confidence in the market,” said an expert from US Commercial Affairs.

Coming back from the Europe, Mr. Dang Thanh Tam said, “Many economic groups in Europe are keen on investing in Vietnam. A 30 – billion USD investment fund in Norway is famous for its conservative mindset but has paid much attention to Viet Nam.”

According to Mr. Phan Huu Thang, Head of the Foreign Investment Department under the Ministry of Planning and Investment (MPI), FDI from North Africa, Europe and Japan all show positive signs in the near future.

Efforts to satisfy investors

Although FDI continued to pump into Viet Nam, a recent survey by the Japan External Trade Organization (Jetro) revealed Japanese enterprises have become less satisfied with the investment environment in Viet Nam. With the approval rate dropping from 75.4% in 2006 to 41.7% last year, the country has fallen from first to fifth place among six ASEAN countries having Japanese investors. The reason was said to be Viet Nam’s under-developed infrastructure and difficulties in purchasing locally-made materials and spare parts.

Moreover, after being improved significantly, administrative formalities in the South showed problems. Investors complained that the waiting time for investment license approval by the Ho Chi Minh Planning and Investment Department is longer than that in Hanoi.

Mr. Thang noted, “We listened to the concerns of investors and are coordinating with local authorities to resolve the issue. We will try to deal with the problem after surveys on project progress in cities and provinces nationwide are revealed. This year, speeding up the disbursement of FDI projects is our top priority.”

Six months will draw more than 23 billion USD of FDI

Mr. Thang forecast FDI in the first six months will exceed 23 billion USD, the highest rate ever. He also said that about five large projects, including the Nghi Son Oil Refinery Plant worth 6 billion USD, will be licensed from now to the end of this month. Furthermore, FDI capital in technology is soaring. (Tuoi Tre)