FDI Flow into Vietnam on Upward Trend
FDI Flow into Vietnam on Upward Trend
Foreign direct investment (FDI) flow into Vietnam has seen a stable growth over the past years. Inward FDI this year is expected to be higher than last year and the figure for 2005 will be more positive, said senior economist of the United Nations Development Program (UNDP), Jonathan Pincus.
Vietnam has created a very good investment environment, meeting foreign investors’ demand on diversifying their investment to avoid risk, UNDP experts said at a press conference at the end of September to announce the United Nations' World Investment Report 2004.
With 80 million people, Vietnam is an attractive market for investors. Vietnam’s forthcoming WTO accession is also an excellent opportunity for them.
According to the report, global FDI flow is moving towards services. The trend is advantageous for developing nations.
UNDP experts said Vietnam has recognised the important role of the services sector. The Government has set up a special unit for planning and managing implementation of trade and service policies. UNDP is deploying a project to help Vietnam improve the ability of its building trade and service policies in order to raise competitiveness of Vietnam’s economy and bring FDI to prioritised fields.
However, Vietnam’s service sector is still weak compared with other countries worldwide. The ratio of services in gross domestic product stands at around 40 per cent, compared with a rate of 50-70 per cent in developed countries. Vietnam needs a more effective and comprehensive service development strategy with an emphasis on seaport, transport, telecommunications, and logistics.
Besides, economic experts said Vietnam should not pay much attention to volume of FDI. It should focus on the quality of the capital source. To this end, Vietnam must create a stable and consistent system of policies. The country must reduce domestic protection in order to raise competitiveness among economic sectors – providing a genuine momentum for development.
Vietnamese
