Vietnam attracts US$1.69bil in foreign investment in January

Producing shoe components at a foreign-invested company, in Thuan An City, Bình Duong Province. — VNA/VNS

HANOI (Vietnam News/Asia News Network): Vietnam lured US$1.69 billion worth of foreign investment in the first month of 2023, down 19.8 per cent year-on-year, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.

One bright spot in January was that 153 new foreign-invested projects, valued at $1.2 billion, were granted licences, up 48.5 per cent in number and 3.1 times in value, which was a signal to confirm the confidence of foreign investors in the investment environment of Vietham, the FIA said.

During the month, capital added in operating projects by foreign investors saw a yearly decline of 76 per cent to $306.3 million while their capital contributions and share purchases also declined 61 per cent year-on-year to over $174 million.

At the same time, disbursed capital also witnessed a decline of 16.3 per cent to an estimated $1.35 billion in the first month, the FIA said, adding that the processing and manufacturing industry saw $1.05 billion worth of foreign investment disbursed, making up 77.6 per cent of the total.

Since January saw two long holidays - New Year and Lunar New Year, the decrease recorded in registered foreign investment capital, or even disbursement, had not yet reflected the general trend of foreign investment capital flows to Việt Nam in 2023, according to the agency.

Projects related to wholesale, retail, and repair of automobiles and motorised vehicles accounted for the lion’s share of the total registered sum, at 54.1 per cent or $651.9 million. They were followed by those in the processing and manufacturing industry, which together registered $351.2 million in capital or equivalent to 29.1 per cent and those in other sectors at $202 million or 16.8 per cent.

Also in January, 28 foreign countries and territories invested in Việt Nam. Singapore was the largest with $767.6 million, followed by China with $198.2 million.

Meanwhile, Vietnamese investors poured $126.7 million into their projects overseas, increasing by 3.4 times against the same month in 2022.

Among three countries and territories receiving investment from Việt Nam, South Korea was the leading country with $125.1 million, accounting for 98.7 per cent of total investment capital; followed by Thailand ($1.5 million or 1.2 per cent); and Laos ($140,000 or 0.1 per cent).

Vietnam is expected to attract a lot of FDI this year due to its impressive economic performance in 2022, improved business climate and the advantages brought by the free trade agreements it has signed, experts said.

Do Van Su, deputy director of the Department of Foreign Investment, said Việt Nam is likely to attract $36-38 billion worth of FDI in 2023.

South Korea, Japan and Taiwan (China) are expected to be among the main sources of investment as they continue to pump money into Southeast Asia.

Economist Le Dang Doanh said the country needs to further speed up administrative reforms, improve its investment environment and ensure policy stability.

Minister of Planning and Investment Nguyen Chí Dung said priority would be given to projects that use new and green technologies and have high added value.

Though there are admittedly still problems related to human resource quality, Vietnam remains an appealing destination for foreign investors due to its supportive policies, he added.

A recent survey done by the Ministry of Planning and Investment found 76 per cent of enterprises saying they were satisfied with the Government’s support policies.

They were most satisfied with the VAT waiver and reduction policies, and those to stabilise gasoline prices, improve the work permit issuance process and customs clearance procedures, and support import- export and workers’ livelihoods.

To continue to attract foreign investment, Dung said it is vital for Vietnam to develop innovation and financial centres at the regional and international levels.

It is also important to stabilise the economy and improve infrastructure and the quality of human resources, he added.

Last year FDI was worth nearly $22.4 billion, according to the General Statistics Office.

Of the more than 100 nations and territories investing last year, Singapore topped with $6.46 billion, followed by South Korea ($4.88 billion) and Japan ($4.78 billion).

They invested in 54 provinces and cities of which HCM City attracted the most: $3.94 billion.

Binh Duong was second with $3.14 billion and Quang Ninh was third with $2.37 billion.

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