Enterprises Tend to Promote Investment in Foreign Countries

According to the Ministry of Planning and Investment, in October, 2005, Vietnamese enterprises invested in seven projects in foreign countries, which were capitalised at US$13.1 million, bringing the total number of projects developed by Vietnamese enterprises in foreign countries to 32 projects, capitalised at US$97.7 million. By October 2005, Vietnamese enterprises had developed a total of 145 projects with a total registered capital of over US$323.65 million. The average scale of each project is around US$2.3 million.

 

According to the Ministry of Planning and Investment, Vietnamese enterprises have invested in mainly the construction and industrial sectors. More specifically, they have invested in oil and gas exploration and extraction, household goods, construction material production with 62 projects, valued at US$208.9 million, accounting for 42.7 per cent in the number of projects and 64.5 per cent of registered capital. The have invested around US$81.9 million in 26 projects in agriculture, forestry and fisheries, accounting for 17.9 per cent of the number of projects and 25.3 per cent of total registered investment volume. The remainder has been invested in services, with 39.4 per cent in the number of projects and 10.2 per cent of total registered capital volume.

 

Vietnamese enterprises have invested in 31 countries and territories in the world but mainly in Iraq with US$100 million, or 30.9 per cent of total registered capital, for exploring and exploiting oil and gas. They have invested 47 projects, valued at US$91.9 million, or 28.3 per cent of total registered capital in Laos. The two countries have occupied 59.2 per cent of total registered capital. The remainder has been invested in Asian and European countries.

 

In general, Vietnamese enterprises’ projects and their capital volume remain small due to their constrained financial sources and investment experience. However, in the first ten months of 2005, the number of projects developed in foreign countries, in particular Laos, increased rapidly.

 

Also according to a source from the Ministry of Planning and Investment, in October, 2005, total realised capital of the foreign-invested sector in Vietnam was estimated at US$325 million, bringing the total realised capital for the first ten months of 2005 to US$2.78 billion, up by 17.5 per cent against one year ago.

 

Revenues of foreign-invested enterprises in October were estimated at US$2.3 billion, bringing total revenues of the enterprises in ten months of 2005 to around US$18.9 billion, up by 35.4 per cent over the same period of 2004.

 

The sector’s export turnover was estimated at US$1.1 billion in October, bringing total non-oil export volume of the sector in ten months to US$8.9 billion, up by 27 per cent against that of the same period of 2004.

 

Foreign-invested enterprises’ import turnover was put at US$1.35 billion in October. Their total import turnover in ten months stood at US$11 billion, up by 27 per cent against one year ago.

 

The sector’s budget contribution was put at US$83 million in October, bringing the total figure of ten months to US$895 million, up by 35.8 per cent against that of the same period last year.

 

In October, 2005, foreign invested enterprises attracted around 12,000 more workers, bringing the total number of workers in the sector to 858,000 by late October, 2005, up by 17.1 per cent against that of the same period last year. Also, up till October 2005, Vietnam had attracted a total of US$4.58 billion from new projects and projects applying for capital increase. This represents an increase of 41.7 per cent over a year ago, and an excess of two per cent against the yearly target of US$4.5 billion for 2005.

Even though Vietnamese enterprises’ investment in foreign countries remains low in comparison with foreign investment capital in Vietnam, there is a clear sign of a promotion of Vietnamese enterprises’ investment in foreign countries and territories. How it will benefit Vietnam is certainly clear to policymakers and the Ministry of Planning and Investment.