Illustrative image (Source: VNA)Hanoi (VNA) – Free tradeagreements (FTAs) that Vietnam has signed with its partners have been animportant factor attracting foreign investments to the country.
In the first eight months of 2020, Vietnam attracted19.5 billion USD in foreign direct investment (FDI), down 13.7 percentyear-on-year.
There were 1,797 new FDI projects licensed,with registered capital totalling 9.73 billion USD, down 25.3 percent inproject numbers but up 6.6 percent in value compared to the same period lastyear.
The increase in value showed thatnew-generation investment attraction policies have proved effective despitenegative impact of the COVID-19 pandemic.
Chairman of the European Chamber ofCommerce in Vietnam Nicolas Audier said that FTAs that Vietnam signed withJapan, the European Union and the Eurasian Economic Union are helpful forVietnam’s FDI attraction.
In addition, the Vietnamese Government’srapid response and measures to help enterprises deal with difficulties causedby the pandemic have helped raise foreign investors’ confidence in thecountry’s business climate.
The EuroCham Business Climate Indexincreased from 27 percent in the first quarter to 34 percent in April and has remainedstable until now. The BCI, which was released in July, also found that morethan 25 percent of European enterprises had benefitted from the Government’spostponement of tax, while around one-in-five had benefitted from a reductionin rent and a suspension of social insurance contributions.
Experts said that Vietnam will welcome biginvestment flows from the EU and Japan.
According to the Japan External TradeOrganisation, the Japanese Government increased the value of an economicsupport package to 2.2 billion USD, which is expected to speed up itsbusinesses’ shifting of investments from China to ASEAN, particularly Vietnam.Currently, around 3,500 Japanese businesses have demand of investing orexpanding production in the country.
Jacques Morisset, World Bank Lead Economistand Programme Leader for Vietnam, said he himself and many governments andmultinationals believe that the pandemic crisis gives an opportunity forVietnam to attract more foreign investors.
“A perception that many multinationals willneed to diversify because of the crisis, and Vietnam is clearly a country thatcan host more FDI, so that would be the first opportunity,” he added.
The WB said in its recent report thatcompetitive production costs, a convenient position in Southeast Asia, strongeconomic efficiency and increasing domestic consumption are Vietnam’sadvantages to lure more foreign investments.
The bank’s 2020 Doing Business report,meanwhile, ranked Vietnam 70th out of 190 economies based on two main factors:improved access to credit information through data distribution from retailersand upgraded information technology infrastructure that makes paying taxeseasier for most businesses.
To attract new flows of investment,Vietnamese localities are exerting efforts to upgrade infrastructure to createthe most favourable conditions for foreign investors./.
VNA
