FDI Remains Bright Spot in Vietnam’s Economy

9:55:30 AM | 7/22/2022

The COVID-19 pandemic, which has lasted for more than two years, has taken a toll on all business and trade activities, and especially the Ukraine war has pushed the world economy into a gloomy state. However, in the general picture of the economy, FDI into Vietnam was a bright spot in the first months of the year.

According to the General Statistics Office, the total registered FDI capital into Vietnam in the first six months of the year reached more than 91.1% over the same period last year, equivalent to US$14.03 billion, down by 8.1% compared to the same period last year. However, in the current context, in general, FDI is a bright spot with a positive trend with two new billion-dollar investment projects, including Long An LNG Power Plant Project I and II (Singapore) with the total registered capital of over US$3.1 billion and O Mon II Thermal Power Plant Project (Japan) with total registered capital of over US$1.31 billion.

The additional registered capital of foreign investors in two quarters increased by 65.6%, reaching US$6.82 billion. The realized investment capital of the FDI sector reached nearly US$10.1 billion, up 8.9% over the same period in 2021. These indicators clearly reflect the recovery of production and FDI inflows.

The reason for this result, according to the General Statistics Office's report, is thanks to the right decisions of the Government. Specifically, from mid-October 2021, the Prime Minister promptly adopted the COVID-19 pandemic prevention and control strategy in accordance with Resolution 128/NQ-CP under the motto "safe, flexible adaptation to and effective control of the COVID-19 pandemic", which has opened up opportunities for businesses to return to operations in new normal. In addition, implementing the dual goal of fighting the pandemic and developing socio-economically since the fourth quarter of 2021 has helped the Vietnamese economy to have a strong recovery. In addition, the benefits of political stability, geographical location, and abundant labor resources have also made many foreign investors still consider Vietnam a safe and attractive investment destination.

However, Vietnam needs a long-term solution to continue attracting FDI. According to Ms. Nguyen Thi Huong, Director General of the General Statistics Office, Vietnam needs to focus on a number of solutions. Specifically, Vietnam needs to focus on perfecting investment institutions in the direction of facilitating foreign investors, researching and promulgating policies suitable for each industry and field to attract quality FDI inflows. In addition, it is necessary to review all industrial parks, publish a list of industrial parks with clean land funds and infrastructure ready to attract foreign investment. At the same time, the country should actively implement investment promotion campaigns, affirming that Vietnam is a safe and reliable investment destination. We should also actively connect and work with major corporations in the world to exchange and share investment opportunities. It is necessary to upgrade infrastructure, improve traffic connection between provinces and regions, and create favorable conditions for investment attraction, production and business development.

By Giang Tu, Vietnam Business Forum