FDI – the bright spot of Vietnam's economy amid Covid-19

A garment and textile production line at Bowker Vietnam Garment Company Ltd in the southern province of Bình Dương. The FDI sector now accounts for around 25 per cent of total social investment, 55 per cent of total industrial production value in Vetnam. — VNA/VNS

HANOI (Vietnam News/Asia News Network): Foreign investment is the silver lining in Vietnam's economic picture amid the adverse impacts of the Covid-19 pandemic on the national and global economy, said President of the Vietnam Association of Foreign Invested Enterprises (VAFIE).

VAFIE released an annual report on foreign investment in Vietnam last year at a meeting in Hanoi on Tuesday (May 10).

The report was made with the co-operation of KPMG Vietnam that provides independent audit services and the support of the Foreign Investment Agency under the Ministry of Planning and Investment, Fiin Group and some economists, according to VAFIE Deputy Chairman Nguyễn Anh Tuấn.

The 250-page report, in both Vietnamese and English, is expected to be useful for policy-making agencies, research and training institutions, FDI firms and international investors, he said.

Mại, however, pointed out outstanding problems during the attraction and use of FDI such as the modest number of high-tech projects from the US and Europe.

Besides, contributions to the State budget of many FDI enterprises did not match their investment scale and the incentives they are entitled to.

The structure of FDI in terms of regions and localities remains unbalanced, and too few businesses established research and development (R&D) centres.

Noting that the Politburo issued Resolution No 50-NQ/TW dated August 20, 2019 on orientations to consolidate institutions and policies in order to raise the quality and efficiency of foreign investment by 2030, Mại said the VAFIE realised the need for a report on FDI in Vietnam, hence the release of the report.

According to VAFIE, since the National Assembly passed the Law on Foreign Investment in Vietnam in 1987, the foreign-invested economic sector has continuously developed, significantly contributing to national economic growth and growth model reform towards industrialisation and modernisation, accelerating Vietnam’s international economic integration and improving its position in the world.

The FDI sector now accounts for around 25 per cent of total social investment, 55 per cent of total industrial production value in Vietnam, and more than 70 per cent of the country’s export revenue.

It has generated direct jobs for 4.6 million people or more than 7 per cent of the country’s workforce, and indirectly created jobs for millions of others.