Vietnam Likely to Pull in US$4.5Bln in FDI this Year

Vietnam Likely to Pull in US$4.5Bln in FDI this Year

Vietnam is likely to attract US$4.5 billion in foreign direct investment (FDI) capital in 2005, up 9.75 per cent against 2004, said Phan Huu Thang, director of the Foreign Investment Department under the Ministry of Planning & Investment.

Many large FDI projects are expected to be licensed early this year, including a US$114-million project on building a 65-storey building in Hanoi and a US$57 million project on building a factory to produce Yamaha motorbike engines in the North Thang Long Industrial Park in Hanoi.

In order to attract US$4.5 million in FDI this year, according to the Ministry of Planing & Investment, many measures have to be taken.

Vietnam will have to continue to amend its investment policies and further open the local market to foreign investors, especially in such areas as trading service, credit, insurance, telecoms, advertisement and training. The country should also create favorable conditions for foreign investors to participate in such industries as steel, cement and energy. FDI capital should also be driven to building infrastructures.

The country will also continue to improve its investment licensing procedures. Accordingly, the time needed for evaluating the investment applications will be shortened and authorities of large cities and provinces will be able to grant licenses for investment projects with a registered investment capital of up to US$40 million each.

The new Investment Law, which will be applicable for both domestic and foreign investors, is expected to create a level playing field for the investors in Vietnam.

Vietnam licensed 679 new FDI projects with a total pledged investment of over US$2.84 billion in 2004, raising the total number of operational FDI projects in the country to 5,070, capitalized at nearly US$45.91 billion.

FDI firms in the country reported total industrial production of VND126.31 trillion (US$8.045 billion) in the year, up 15.7 per cent annually and accounting for 35.68 per cent of the country's total.

The total export revenues of FDI companies reached US$14.27 billion in 2004, up 40.4 per cent against 2003 and accounting for 54.87 per cent of Vietnam's total. FDI firms spent nearly US$10.97 billion on imports in the year, up 24.4 per cent against 2003.

• B.T