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Vietnam Today

Seminar held on FDI impact

Released at: 16:10, 10/04/2015

Seminar held on FDI impact

A number of recommendations have been given for changes in policy regarding foreign investment.

by Hung Nguyen

The National Center for Socio-Economic Information and Forecast (NCIF) under the Ministry of Planning and Investment (MPI) held a seminar regarding the impact of Foreign Direct Investment (FDI) on enterprises in Vietnam on April 9. The seminar gave an overview of FDI in Vietnam and its direct, spill-over and indirect effects on Vietnam's economy. Finally, a conclusion was reached to give recommendations on changes in policy.

Graph 1: Proportion of FDI projects by investment partners accumulated as of March 20, 2015

Graph 2: Proportion of registered capital by partners accumulated as of March 20, 2015

Graph 3: Percentage of registered capital by sector accumulated as of March 20, 2015

Graph 4: Percentage of registered FDI by area accumulated as of March 20, 2015

Policy Recommendation

The researcher recommended that Vietnam should have the support policies to strengthen the internal capacity of local firms, reducing distances and increasing absorption of Multinational Cooperations (MNCs) technology: supporting the training of human resources, technology transfer, and development of technical infrastructure. Making policies to strengthen links between domestic enterprises and foreign-invested enterprises.

Furthermore, improving the legal framework for mergers and acquisitions of foreign elements, thereby promoting technology, labor, markets and corporate governance.

Increasing policies supporting industrial development in accordance with the strategic development of national industry, improve ties with MNCs and participating in the global supply chain. In particular, the research model of building cross-links, forming satellite businesses, and manufacturing components for export-oriented FDI enterprises (electronics, refrigeration, textiles, automobile manufacturing, motorcycles ...).

Finally, It needs to consider which FDI suits each sector, regional economic conditions, geography, human resources, and the impact of attracting local businesses to participate in global value chains.

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Being focus, draw a detail plan to focus on the sector that Vietnam has potential to be success by own, try to take advantage from other technology and experience. Btw, "Make in India" is a good lesson to learn