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|The government needs $150 billion to support its economic growth targets until 2010 and 35% of that is expected to come from foreign investors.|
| The government of Vietnam is targeting an average gross domestic product (GDP) growth of 8-8.5% from 2007 to 2010, and it is counting on foreign direct investments to achieve that goal, according to a senior government official. |
“We plan to raise $150 billion for economic development (to meet the GDP growth target), in which foreign capital accounts for 35% ,” says Phan Huu Thang, director general of the Foreign Investment Agency of Vietnam’s Ministry of Planning.
Given those goals for economic expansion and fund raising, attracting foreign direct investment (FDI) is a top priority for the government, says Thang, who made the comments at the Funds World Vietnam 2007 conference being held in Ho Chi Minh City this week.
Several industries are among the priorities for attracting FDI. These include new materials and energy production, technology, agriculture, infrastructure, and human development, to name a few.
Last month, Vietnam released a list of more than 160 projects that need FDI from now until 2010.
“We would like to send a positive signal to the foreign investor community about the determination of the government in speeding up intensive economic reform and international economic integration process,” Thang says.
Vietnam’s FDI commitments totaled $11.2 billion in the first 10 months of 2007, and the figure is expected to reach $15 billion by year-end, Thang notes. So far this year, foreign firms in Vietnam have disbursed $3.71 billion in investments.
From 2001 to 2005, Vietnam’s GDP has grown at an average of 7.5% annually. Last year, GDP grew by 8.2% and this year’s growth is expected to top that at 8.5%, which will be the country’s highest growth rate within the last 10 years.
Thang is confident Vietnam will be able to attract a steady flow of FDI in the coming years, noting the often cited reasons that include the country’s strong economic growth prospects itself and its entry into the World Trade Organization this year and the reforms that go with that.
Other reasons include Vietnam’s efforts to hasten the so-called equitisation process of state-owned enterprises. In 2006, more than 950 state-owned were transformed, and 600 of those were equitised. Thang expects another 600 state-owned enterprises to be equitised by year-end. In Vietnam, equitisation refers to the first of two stages involved in getting a Vietnamese company onto the stock markets. The most common equitisation process in Vietnam involves a company launching an IPO to turn itself into a shareholding concern first and then placing private offerings.
Investing directing in companies in Vietnam is one of the best ways to position ahead of that country’s economic growth, according to some fund managers in attendance at the Funds World Vietnam 2007 conference. They note that foreign ownership limits tend to contain the amount of exposure foreign investors can have in Vietnam’s stock market, which has been among the best performers in Asia in recent years.
Thursday, November 01, 2007
Vietnam targets $52.5 billion in FDI
Posted by Saigon Charlie