FDIs advance Vietnam's exports

FDIs advance Vietnam's exports

In recent years, Vietnam has continued to increase its imports and exports.  In the first half of 2004, the export value was US$11.8 billion, 54 per cent of the year's plan and 19.8 per cent more than the same period last year. In June alone, the export value was US$2.05 billion, an increase of 3.8 per cent and a new record for Vietnamese exports with a monthly export value that exceeds the US$2 billion mark. This is due to the increased prices in the world market and the positive contribution by FDI enterprises.

The FDI role

FDI enterprises are playing an increasingly important role in Vietnam’s economy. According to the Trade Ministry, the export value of the FDI sector continues to post higher growth rates than any other economic sector in Vietnam. In 2003, its export value (excluding crude oil) was US$6,430 million, 37.7 per cent more than 2002 and making up 30.6 per cent of the total export value of the country. If crude oil is included, the FDI export value was US$10,002 million, an increase of 28.5 per cent and constituting 51 per cent of the total export value, while the corresponding figures of Vietnamese enterprises were US$9,868 million, 12.1 per cent and 49 per cent, respectively.

In the first half of 2004, the FDI export value was US$6,456 million (including crude oil) an increase of 29.8 per cent, continuing its lead with 54 per cent of the export value and a playing crucial role in attaining the growth rate of 19.8 per cent. If the same momentum is maintained to the end of 2004, the FDI sector will exceed the growth rate of 16.4 per cent and 50 per cent in export value. The main exports of the FDI sector are electronic parts, cables and wires, bicycles and parts, textile and garments and footwear. These are also among the 19 main exports of Vietnam.

Measures to heighten exports

The role of the FDI sector is well established in the export activities of Vietnam, which proves the correctness and effectiveness of policies on the development of FDIs. To improve the performance and export of the FDI sector, the Trade Ministry, together with related authorities, are working on certain policies to be applied in the near future. Firstly, concerning international commitment on import licenses, Vietnam will simplify and make transparent the procedures and formalities to attain the licenses for Vietnamese businesses and FDI enterprises. Secondly, regarding the equal treatment of FDIs and Vietnamese enterprises for the importation of materials and equipment for production, the Trade Ministry is drafting a text, to be approved by the Prime Minister, granting FDIs the same rights as their Vietnamese counterparts when completing all import formalities at the customs office (except for materials exempted from tax for five years, fixed property and promotion commodities).

Mr. Pham Sy Chung, Deputy Head of the Planning and Investment Department under the Trade Ministry, also disclosed that the Vietnamese government will broaden business activities of FDI enterprises in areas such as services, imports, domestic distribution, transport and post and telecommunications. The Trade Ministry is also endeavouring to facilitate business activities of foreign investors involved in importing and exporting in Vietnam.

• Cong Ly