Optimistic about Vietnam’s Economic Resilience

9:21:46 AM | 10/11/2021

The foreign direct investment (FDI) community has expressed optimism and confidence about Vietnam’s strong economic resilience in the coming time and affirmed that Vietnam will still be a safe, attractive and potential investment destination for investors.

Large FDI firms are strongly confident about Vietnam's investment environment

According to surveys, 67% of European businesses had a positive outlook of Vietnam's business environment. Japanese companies expressed optimism about the likelihood that Vietnam's economy will recover soon in 2021, with 47% expressing plans to expand business in Vietnam. South Korean firms all had new investment plans in Vietnam. Most United States firms highly appreciated the Government's efforts in responding to the pandemic and believed that Vietnam will soon contain the pandemic.

At a recent online workshop themed "COVID-19 and FDI: Impacts and Prospects" hosted by the Government Portal, Mr. Choi Joo Ho, General Director of Samsung Vietnam, said, when the COVID-19 pandemic broke out, Samsung was still on track to complete its export target in the first six months of the year. There are many negative effects arising from the COVID-19 pandemic, but Vietnam will remain an attractive investment destination for foreign investors in the long run.

He said, being confident about its ability to overcome problems caused by the COVID-19 pandemic and trusting the Vietnamese Government, Samsung Vietnam will continue to expand its investment. To date, the group has disbursed all registered funds and added hundreds of millions of US dollars of investment capital every year.

Expressing his full support for the Vietnamese Government's policy in pursuing the dual goals of effectively preventing the pandemic and boosting economic development, Samsung Vietnam General Director Choi Joo Ho suggested that Vietnam further check the harmony of these two goals. In addition, he said that provinces where industrial parks are concentrated should agree on a standard guideline on pandemic prevention to smoothen mobility and transportation of people and goods, and minimize damage to industrial zones because of extraordinary events like the COVID-19 pandemic.

Mr. Binu Jacob, General Director of Nestlé Vietnam, expressed his confidence in Vietnam's future as a global and regional manufacturing hub and committed to the continued expansion of sustainable investment in Vietnam. Nestlé, an investor in Vietnam for more than 25 years, recently decided to expand its investment in Vietnam by an extra US$132 million to build Nescafe Tri An factory in Dong Nai province.

He shared his recommendations that may help the Government succeed with the dual goals and increase FDI inflows in post-COVID-19 economic recovery. "We support the Government's strategic policy approach of safely responding to the virus and reopening the economy," he added, noting that vaccinations are key to enabling safe reopening and economic recovery.

Besides, the coordination of policies across the country and among provinces is very important. “In that regard, we welcome the Government's adoption of Resolution 105/NQ-CP on supporting enterprises, cooperatives and business households in the context of the COVID-19 pandemic and the establishment of the Prime Minister's special working group responsible for supporting businesses and people affected by the COVID-19 pandemic, led by Deputy Prime Minister Le Minh Khai," he said.

Mr. Binu Jacob expressed his appreciation for the Government's unremitting efforts in improving institutions and making the business investment environment more open and stronger. "We are also very delighted that the Government has paid attention to the concerns and recommendations of the private business community, and today's talk is another example of that concern," he said.

Lessons learned

As senior leaders of two provinces where many FDI enterprises are investing and doing business, including Samsung, Canon and Nestle, Vice Chairwoman of Dong Nai Provincial People's Committee Nguyen Thi Hoang and Vice Chairman of Bac Ninh Provincial People's Committee Vuong Quoc Tuan shared many experiences and policies seen to be key to attracting FDI flows.

Dong Nai province boldly empowers businesses to decide their business matters rather than force them to stop or continue production. They actively build their own production plans that match their methods. The province only requires that their workers must be from "green zones" and move among "green zones" only. At the same time, the province continues to provide vaccinations for workers and ensure access to quick tests at reasonable prices or encourage them to test for their own workers if they have qualified medical staff, as guided by the Ministry of Health.

Bac Ninh province, which was hard hit by the fourth wave of COVID-19 in early May 2021, set up 40 working groups to directly check the safety conditions of enterprises. The province decided that 50% of health workers are sent to factories immediately and the remaining 50% will stay in the community and will immediately replace factory workers if the pandemic lasts long. Therefore, within only eight days (from June 2 to June 20), the pandemic was controlled and production was restored relatively stable.

“From our experience in pandemic prevention, we find it very important to support production recovery. We established a quick response team led by the Standing Vice Chairman of the Provincial People's Committee, which delivers the most effective consultation, fastest resolution and safest anti-pandemic measures. Thus, even during the most stressful pandemic, factories still operate at 50% or more of capacity. We also created maximum conditions to vaccinate workers and provide support for workers, even non-contract workers,” said Mr. Vuong Quoc Tuan.

He added that in the coming time, to be a safe and attractive investment destination, Bac Ninh will focus on the following contents: Creating the most favorable conditions for investment environment and incentives for investors; preparing business spaces, infrastructure, mechanisms and human resources for investors, changing investment promotion methods, attracting investors to match our orientations, actively responding to investors' requirements, introducing plans to draw investors into locally strong areas (electronics, semiconductor and artificial intelligence), creating a business support ecosystem, mobility infrastructure and accommodation conditions for workers, and facilitating entry of foreign experts into Vietnam.

Vietnam gives priority to attracting FDI projects from the diversification trend and production repositioning in high-tech industries, projects with innovations, and projects with strong ripple effects in which investors commit to cooperate and facilitate Vietnamese enterprises to join global production chains and value chains and train human resources; conduct research and development; promote the digital economy and actively contribute to Vietnam’s sustainable socio-economic development. Most recently, the Government issued Resolution 115/NQ-CP on solutions to foster the development of supporting industries, which sets a goal that Vietnam will have about 1,000 parts vendors capable of serving multinational corporations in Vietnam by 2025 and 2,000 vendors by 2030.

Ms. Nguyen Thi Bich Ngoc , Deputy Minister of Planning and Investment

By Nam Pham, Vietnam Business Forum