Vietnam is likely to attract a new record in foreign direct investment (FDI) this year, said representatives from several major international financial groups at the second Vietnam Investment Forum in Hanoi on March 19.
"Attracting between US$15-17 billion in FDI in 2007 is within the country's reach," said General Director of the Vina Capital Fund, Don Lam, revealing his company's plan to pour US$400 million into building a complex of shopping centers and apartments for lease in Vietnam.
Director General of the Dragon Capital Fund Dominic Scriven shared Lam's view, adding that a series of big FDI projects will be carried out in Vietnam in the coming time, including of a US$5 billion project of the Hon Hai Precision Industry Ltd. Company of Taiwan.
Vietnam, with highly favorable conditions of a young population and an abundant labor force with improving skills, has becoming more and more appealing to foreign investors, said General Director of the Hong Kong and Shanghai Banking Corporation (HSBC), Michael Geoghegan. Besides, he said, local people are quick to use hi-tech services like the internet and mobile phones.
However, participants at the forum agreed that maintaining this capital flow is a challenge for the country, as difficulties remain in implementing approved projects, namely low capital disbursement, cumbersome procedures and inconsistent law enforcement.
Dragon Capital's chief Scriven agreed that the flow of direct or indirect foreign investment depends on domestic factors, and whether the country maintains the investment capital flow depends on how it treats customers and partners. However, he said he is optimistic that capital flow into Vietnam will continue increasing.
The latest economic freedom ratings, published by the Fraser Institute and members of the Economic Freedom Network, rank Vietnam 138th out of the 157 rated economies, with China 119th and Thailand 50th.
Investors suggest Vietnam needs to promote capital management capacity, reform the investment licensing process, and create a more open and transparent investment and business environment.
Last year, the country attracted total capital of US$10.2 billion in FDI, a record level far beyond the year’s target of US$6.5 billion. (VNA)
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