Vietnam Targets FDI Inflow of US$5.5Bln in 2006

The Ministry of Planning and Investment (MPI) has set a target to attract US$5.5 billion in foreign direct investment in 2006 given the predicted improvement of investment climate in the country next year.

 

According to Deputy Minister Nguyen Bich Dat, the goal is totally achievable as the country will ratify a common investment law, win WTO membership and open a new socio-economic plan for the 2006-2010 period next year.

 

The target was also set basing on thorough consideration of global FDI trends and capital absorption capability of the local economy, said Nguyen Anh Tuan, deputy head of the MPI’s Foreign Investment Agency.

 

In order to meet the target, the MPI plans to carry out a new method of investment promotion that includes direct discussions with potential partners about details of projects. Moreover, the ministry will list lesser projects for the 2006-10 period but with higher feasibility, compared to the 2001-05 list whereby only 38 per cent of 231 projects were realized.

 

Early next month, the MPI will hold Vietnam’s biggest investment promotion in Hanoi, hoping the exhibition will act as an official channel for introducing Vietnam’s investment encouragement policies to international investors.

 

After Forinvest 2005, MPI schedules a similar investment promotion program to be held in Japan.

 

According to MPI’s latest statistics, Vietnam has drawn in US$4.58 billion worth of FDI capital so far this year, up 41.7 per cent on-year and exceeding the yearly target of US$4.5 billion. The figure includes US$3 billion from 659 newly licensed projects and US$1.58 billion from the expansion of existing projects.

 

With current favourable conditions, the figure may exceed the US$5 billion level to reach US$5.2 billion or even US$5.4 billion, the highest levels since the 1997 Asian financial crisis, Deputy Minister Dat said.

 

At present, FDI accounts for 18 per cent of total investment capital, 15 per cent of GDP, 54 per cent of total export turnover. The sector directly generates 800,000 jobs, and contributes US$1 billion to the State budget every year.