Government agencies must step up efforts to screen FDI inflows for their possible implications to national security, particularly those from countries having territorial disputes with Vietnam, according to Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises (VAFIE).
Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises (VAFIE).
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Mai made the statement in reference to the Politburo’s Resolution No.50 which provides guidance on perfecting the legal framework and policies towards greater efficiency in foreign investment until 2030.
In the resolution, Vietnam’s supreme decision-making body has requested local authorities to ensure national security alongside its economic impacts of foreign investments.
To fulfill this objective, Mai suggested each city and province be given more autonomy and responsibilities in evaluating FDI projects, while enhancing supervising activities both in terms of technologies and the human factor to prevent environmental disaster similar to that of Formosa Ha Tinh Steel Corporation which happened in April 2016, leaving serious consequences on the livelihood and the maritime environment.
Mai expected Vietnam’s stricter regulations in attracting FDI projects would not put off potential investors looking for long-term business opportunities in Vietnam, as the country has been taking measures to ensure the lawful rights of foreign companies.
To deal with investors having limited financial capabilities, high risks of transfer pricing and trade frauds, Mai said government agencies must be selective in approving FDI projects and set up efficient mechanism to supervise the implementation process.
According to Mai, Vietnam’s improving relations with the US and the signing of EU – Vietnam Free Trade Agreement (EVFTA) would open the doors for more investment capital from developed countries. So the decision is in the government’s hands to choose the most appropriate investment projects to Vietnam’s development strategy, Mai stated.
After the issuance of Resolution No.50, Mai urged the government to speed up the economic reform process, as time is essential in a fast-changing world.
The Politburo sets target for FDI commitments in the 2021 – 2025 period at US$150 – 200 billion, averaging US$30 – 40 billion per year, and disbursement of US$100 – 150 billion during the period.
In the 2026 – 2030 period, FDI commitments would reach US$200-300 billion and disbursement of US$150 – 200 billion.
The rate of enterprises using advanced and environmentally-friendly technologies, as well as modern corporate governance to increase by 50% by 2025 and 100% by 2030 against 2018.
The rate of labor force undergoing training in the economy is expected to jump from 56% in 2017 to 70% in 2025 and 80% in 2030.
In the first seven months of 2019, FDI commitments totaled US$20.2 billion, down 13.45% year-on-year, while the disbursement of FDI projects reached US$10.55 billion, up 6.63% year-on-year.
Out of 95 countries and territories investing in Vietnam in the January – July period, Hong Kong (China) took the lead with US$5.44 billion. South Korea came second with US$3.13 billion, while the third and fourth places belonged to Singapore and mainland China with US$960 million and US$440 million, respectively.
In terms of fresh projects in Vietnam in the first seven months of 2019, China was the largest investor pouring US$1.79 billion into 364 projects, followed by South Korea with 600 projects worth US$1.47 billion and Japan with US$1.12 billion in 257 projects.
