Hi-tech electronic components produced at Japan’s Nidec Sankyo Vietnam Ltd. Company in HCM City.(Source: VNA) They sayit is a good sign that the manufacturing and processing industries are drawingsignificant FDI sums. Statistics compiled by the Vietnam Foregin InvestmentAgency show that in the first quarter of this year, nearly 85 percent ofregistered FDI, or 6.54 billion USD, went to manufacturing and processingindustries.
Accordingto Tran Van Tho, economics professor at Waseda University, Tokyo, FDI has asignificant role to play in promoting domestic industries and driving economicgrowth.
“However, if Vietnam does not have wise FDI policies, the economy will be atrisk of depending heavily on foreign companies and domestic firms will fail toaccumulate resources like technology and capacity,” Tho was quoted by a recentVietnam News Agency report as saying.
He saidthis might lead to distortions in the economic structure in the long term andthe industrialisation process would not be sustainable.
“Externalforce is important but it is the inner force that decides,” Tho said.
He saidthat Vietnam’s industrialisation process was currently heavily dependent onforeign investment, but the FDI sector was not closely linked to the nationaleconomy.
Thocitied statistics showing that FDI accounted for 50 percent of the country’sindustrial output and 70 percent of exports. Some export products, like mobilephones, were solely FDI.
He saidthat Vietnam would need to have policies that encourage FDI inflow into highquality hi-tech production and technology transfer.
Nguyen ThiTue Anh, Deputy Director of the Central Institute for Economic Management, saidthat the FDI sector was not linked closely with domestic firms, which hinderstechnology transfer. At the same time, domestic firms had not engaged deeplywith the supply chain of the FDI sector in Vietnam.
“It isimportant that FDI attraction is targeted at promoting technology transfer andimproving competitiveness,” Tue Anh said, adding that policies should directinvestment to environmentally friendly and hi-tech sectors.
“Rapidglobalization and the fourrth industrial revolution requires Vietnam to beselective in FDI attraction, with a focus on quality rather than quantity,” hesaid
Otherexperts, meanwhile, said it’s time Vietnam focused on attracting investmentfrom giant corporations in the world.
Theynoted that with the Government hastening efforts to improve the investmentclimate, Vietnam is becoming more attractive to foreign investors.
In thefirst quarter of 2017, FDI surged 91.5 percent over the same period last yearto 7.71 billion USD.
EconomistNguyen Mai was quoted by the Nhan Dan (The People) newspaper as saying: “Weshould not worry about how to attract FDI but focus on selecting the bestprojects.”
However,the problem is that the licensing of many FDI projects is now under localauthorities, with the result that many poorly-performing projects have beenapproved.
Thisshowed that the Government should act fast to issue regulations that direct FDIattraction and other mechanisms towards enhanced supervision and projectefficiency, Mai said.-VNA
VNA
