The foreign direct investment (FDI) capital into Vietnam sharply increased in the first quarter of 2007 against the same period of last year, but the FDI amount shrank in Ho Chi Minh City. The fall was attributed to Intel’s project causing a sudden rise in FDI capital amount last year. To fulfil this year’s target, Ho Chi Minh City has sought out measures to attract more FDI capital.
In 2006, aggregate FDI capital into Ho Chi Minh City was US$2.234 billion, up 2.32 times from 2005. Most FDI projects were wholly foreign-owned. Major fields of investment were industry, outsourcing and real estate.
Especially in 2006, FDI flow was directed into the high tech industry, with the highlight of the US$1-billion Intel chip project in Saigon Hi-tech Park. To date, foreign companies invested US$14.9 billion into 2,279 projects in Ho Chi Minh City, accounting for 23.46 per cent of the country’s total FDI capital and 32.24 per cent in project number.
In 2007, Ho Chi Minh City strives to attract FDI capital more or at least equal to the amount it attracted in 2006. However, by the end of the first quarter this year, the city drew only US$169.4 million, down 74.65 per cent on year. The core reason for the decline was the Intel chip project which contributed to 90.5 per cent of Ho Chi Minh City’s FDI capital in the first quarter of 2006.
According to Mr Thai Van Re, Director of Ho Chi Minh City Department of Planning and Investment, the decrease is not a negative result, because many big FDI projects are waiting for investment licences.
Typical projects are GS E&C Company’s project to build Tan Son Nhat - Binh Loi - Vanh Dai road valued US$318 million; two other projects of this company with a combined investment capital of US$217 million; various projects valued some US$800 million in total in high-tech parks and export processing zones; and over US$1-billion Thu Thiem urban area. If the city accomplishes 20 downtown blocks, it can attract billions of US dollars capital.
Several major solutions for the coming time:
1. Accelerating the development pace of the infrastructure system, especially seaports, energy, expressways, belt roads, metro systems, etc.
2. Applying drastic and effective measures on administrative and bureaucratic reform, and corruption and waste prevention.
3. Building an investment promotion programme to call for more investment capital in focal fields including high tech, electronic technology, information technology, infrastructure development project and urban area development projects like Thu Thiem and Tay Bac, etc.
4. Effectively Implementing the Investment Law, the Enterprise Law, the Tender Law and Construction Law.
5. Pioneering the improvement of education reform, the enhancement of human resource training, the upgrading of worker skill levels and the settlement of employment disputes.
6. Proposing the Government introduce roadmaps to eradicate monopolistic businesses and allow foreign investment in businesses that have input costs like electricity, water supply, post, telecommunication, transport, seaport service and airport service.(HCM City Department of Planning and Investment)
Hai Nguyen
Vietnamese
