Thursday, October 09, 2008

$62bil to be injected in Vietnam this year?

Foreign investors are still committing to making big investments in Vietnam in 2008 despite the uncertainties in the world. However, no one knows for sure how much money will actually be disbursed.

$62bil in FDI, a huge amount of money

Vietnam attracted 885 foreign direct investment projects in the first nine months of the year with the total registered capital of $57.1bil.

Le Buu Quang Huy, Director of the Central Region Investment Promotion Centre, said at an October 7 press conference that Vietnam attracted 885 foreign direct investment projects in the first nine months of the year with the total registered capital of $57.1bil.

The central region and the south attracted 609 projects with the registered capital of $43bil, 71% of the total registered capital.

Huy believes that the total FDI capital in 2008 will reach $62bil.

In 2006, the total FDI in the world was $1,306bil, but only 20% was poured into developing countries. China alone attracted $67bil. 

The $67bil was just equal to 2% of China’s economy. The $62bil worth of FDI Huy thinks Vietnam will attract in 2008 is approximately equal to Vietnam’s GDP.

Huy said that several years ago, there were very few projects worth over $1bil. Meanwhile, huge projects worth several billions of dollars nowadays are popular. The oil refinery project in Ba Ria-Vung Tau province, for example, has the registered capital of $6bil, while a project in Ninh Thuan province, $9.8bil.

When will the $62bil come?

$62bil is considered a big jump by Vietnam in attracting foreign investment. However, experts still are reserved when talking about the figure, saying that Vietnam hasn’t gotten the money yet.

Huy said that in 2008, the Ministry of Planning and Investment has taken a lot of tours to check huge FDI projects in order to learn about problems and difficulties investors have faced in order to help investors push up the implementation of projects and disbursement.

One of the biggest obstacles for investors is tardiness in site clearance, which causes tardiness in implementing projects. Other problems cited are poor infrastructure and complicated investment procedures.

Huy emphasised that Vietnam does not accept investment projects which have bad impacts on the environment. He said the country also has a policy of reclaiming land allocated for projects which investors have no intention of implementing but just registered to get land.