Illustrative image (Source: VNA)According to The Australia Financial Review, Vietnam islikely to remain foreign investors’ favoured destination. Though rapidly risingDelta COVID-19 infections have hit manufacturing in Ho Chi Minh City, Vietnam’scommercial hub, the big-picture story of Vietnam being a favoured destinationfor foreign investment is not expected to change, the daily newspaper said. Evenas forecasts are trimmed, economists have faith the nation will bounce back.
“In recent decades, Vietnam has excelled in reeling in thebig fish in electronics, footwear and clothing,” it said. “Low labour costs,reliable infrastructure and a smooth bureaucratic process have attracted thelikes of Samsung, Foxconn, Nike, Adidas, Gap and Levis.”
Garment production for export (Photo: VNA)In the period, 12.5 billion USD was poured into 1,212newly-licensed projects, up 20.6 percent in value but the number of projectswas down 37.8 percent over the same period last year. Meanwhile, 6.6 billionUSD was added into 678 underway projects, a year-on-year rise of 25.6 percentin capital but down 15.8 percent in project number. Foreign investors alsoinvested nearly 3.2 billion USD to share purchase deals, down 43.8 percentcompared to the same period last year.
The agency attributed the decreases in the numbers of newand expanded projects to the travel restrictions and long quarantine policy,which made it hard for foreign investors to make surveys for their plannedprojects. Lockdown and travel restriction measures also affected operations ofFDI firms.
Nguyen Van Toan, Vice Chairman of the Vietnam Association ofForeign Invested Enterprises, stated that due to serious impact of the pandemic,many FDI enterprises faced difficulties in production and business activities.However, these difficulties are only temporary and the possibility of foreigninvestors moving their supply chain out of Vietnam is very small.
Moving a factory out of one country to set up another inother country is very complicated. Therefore, in the immediate future, FDIenterprises have not yet moved out of Vietnam, but they may have to push someorders to other production facilities to avoid supply chain disruption, Toanadded.
Trinh Van Quang, Vina CPK Project Development Manager, saidthat Vietnam is still considered a country benefiting from the wave ofinvestment shift. This once again confirms that Vietnam's investmentenvironment is really attractive to FDI investors, not just because of theadvantage of cheap labour and low rental costs compared to other countries inthe region.
This shows that Vietnam’s policies and socio-politicalstability are a competitive advantage in comparison with others in the region,Quang said.
To ease the impact of the COVID-19 pandemic, economistsstressed the necessity to keep a close watch on the pandemic developments so asto have timely solutions to attract and maintain FDI inflows.
Economist Nguyen Bich Lam, former Director of the GeneralStatistics Office, proposed the Government support foreign investors andaccompany them to overcome current difficulties by such measures as stepping upvaccination, and devising long-term policies to ensure their interests.
'Three-on-site' production model at factories (Photo: VNA)Experts advised Vietnam to focus on stepping upadministrative reform, which will bring practical benefits to investors.
Another suggestion is that Vietnam should work to accessinvestors from new markets. Deputy Minister of Planning and Investment NguyenThi Bich Ngoc said that the Middle East has always been considered a regionwith great potential for investment cooperation. However, at present,investment from this region into Vietnam is still limited. To attractinvestment flows from this market, she proposed studying cooperation modelswith a third party to jointly invest in large projects in Vietnam, and buildinga cooperation mechanism connecting large investment funds of the Middle East inthe development of large infrastructure projects in the Southeast Asiannation./.
VNA
