Friday, January 04, 2008

Vietnam's Foreign Direct Investment hits $83 billion

FDI hits $83.1bil over two decades
15:56' 03/01/2008 (GMT+7)

VietNamNet Bridge – Vietnam attracted a total of US$83.1bil in registered foreign direct investment in the 20 years from 1988 to 2007, the Ministry of Planning and Investment (MPI) reported yesterday.

Registered FDI capital, 1988-2007.
Registered FDI capital, 1988-2007.
At the meeting with the Ministry of Information and Communication in Hanoi, Phan Huu Thang, head of MPI's Foreign Investment Agency, said, since 1988 when Vietnam introduced the Foreign Investment Law, 8,590 licensed FDI projects had been implemented.

FDI in Vietnam increased significantly from 1988-1990 and 1991-1996, Thang said, adding that despite declines in 1997 due to the Asian financial crisis, foreign investment began to rise sharply again in 2000.

"This can be considered as the second wave of investment in Vietnam. [The first wave being the period from 1991 - 1996 period]," Thang said.

The average capital of foreign-invested projects also rose markedly since 1997, Thang said.

In the 1988-1990 period, each FDI project was worth on average $7.5mil per year. During the 1991 -1995 period it was $13mil, while from 1996 -2000 it was $14.8mil. Affected by the 1997 regional financial crisis, the 2001 - 2005 period saw the average capital of foreign-invested projects of $5.2mil, but in 2006 and 2007 it was $14.4mil per project per year.

Industry and construction attracted the greatest amount of FDI, accounting for 66.8% of all the projects and 61% of their registered capital, the agency reported.

Top 10 FDI sources, 1988-2007.
Top 10 FDI sources, 1988-2007.
In comparison, the service sector attracted 22.2% of the projects and 34.4% of the registered capital. The agriculture-forestry-fishery sector accounted for 5% of all the national registered capital.

In the past 20 years, 80 countries and territories have invested directly in Vietnam. Of those, 68% were in Asia, while EU investors accounted for 16.2% and American investors 11.8%.

S Korea is currently the leading investor in Vietnam with nearly 1,900 projects worth about $13.5bil, followed by Singapore, Taiwan and Japan. However, in terms of disbursed capital, Japan comes first having invested $4.99bil in disbursed capital, followed by Singapore and Taiwan.

HCM City, Hanoi, Dong Nai, Binh Duong and Hai Phong top the nation in terms of attracting FDI - both in number of projects and registered capital. Bottom of the list are Dien Bien, Lai Chau and Ca Mau provinces.

FDI enterprises had contributed significantly to Vietnam's socio-economic development in the past years, Thang said.

FDI enterprises accounted for more than half of the nation's export turnover, generating 1.26mil jobs. A further three million jobs were indirectly created by these enterprises, the agency said.

Thang added that Vietnam had set itself the target of focusing FDI from now until 2020 in high technology, information technology, new energy production and service industries.