Thursday, January 24, 2008

Vietnam increases investment abroad

Nhan Dan – Vietnam has taken the initiative in increasing its investment abroad. During the past 20 years, Vietnamese enterprises have invested a total of US $1.39 billion in 249 projects abroad. Hai Thu has more.

Vietnamese enterprises have invested in projects in 35 countries and territories. Laos tops the list in terms of attracting investment from Vietnam. Specifically, Vietnamese businesses have invested in 86 projects in Laos with a total investment capital of nearly US $584 million, accounting for 34.5% of the total number of projects and 42% of the total investment capital.

Cambodia ranks second, attracting 27 projects from Vietnamese investors with total investment capital of US $88.4 million, followed by Russia, 12 projects and US $48 million.

There are also big investment projects in oil and gas exploration and exploitation in Algeria, Iraq and Madagascar.

In 2007 alone, a project to explore and exploit oil and gas in Madagascar was licensed with a total investment capital of US $117.36 million.

As many as 40.2% of the invested projects abroad and 64.2% of the total investment capital has been invested in industrial sector. Vietnamese investors have also paid attention to investing in agricultural sector (accounting for 21% of the projects and 20.5% of investment capital) and services (39.6% of projects and 5.5% of total investment capital).

Initially, some projects have been carried out quite effectively. For example, by investing US $30 million in two projects to explore and exploit oil and gas by the National Oil and Gas Group, PetroVietnam, in Algeria and Malaysia, PetroVietnam have announced they have found oil at both sites. Rubber plantation projects in four provinces in southern region of Laos by the Vietnam Rubber Corporation and Dak Lak Rubber Company with a total investment capital of US $60 million have also been deployed effectively.

Vietnam has built a legal foundation regarding investments by Vietnamese enterprises abroad, including a Resolution by the government promulgated in 1999, a protocol by the Ministry of Planning and Investment on guidelines for investment abroad by Vietnamese enterprises and a protocol by the State Bank of Vietnam on foreign currency management towards investment abroad. However, during implementation, weaknesses have been become apparent.

The Investment Law promulgated in 2005 has overcome these weaknesses. In addition, the Resolution 78/2006/ND-CP has also created more favourable conditions for domestic investors in their investment abroad.

According to forecast by the Ministry of Planning and Investment, in the 2006-2010 period, Vietnamese investors will invest a total of US $1 billion abroad. Many projects invested abroad by Vietnamese businesses are in the process of negotiations. These projects are in sectors such as oil and gas in South-East Asia; electricity in Laos and China; mineral exploitation in Laos; communications in Laos, Cambodia, Hong Kong, Singapore, the US; transport in Singapore, Hong Kong and Russia and import and export and retailing in the US, EU, Japan and China.

This has proved that investing abroad has become a new trend for many domestic businesses.