Vietnam will attract US$19 billion in foreign direct investment (FDI) this year, the highest level since the Foreign Investment Law was enacted in 1988, according to Phan Huu Thang, head of the Overseas Investment Department under the Ministry of Planning and Investment.

Mr. Thang’s comments are not groundless as numbers of big projects were licensed in December, including the three projects worth billions of US dollars in Hanoi, Bac Ninh province and Ha Long City. His forecast figure will exceed the US$16 billion mark set earlier this year.  

According to Mr. Thang, foreign investment in 2007 was focused on industries, electronics, telecommunications and infrastructure construction. Areas such as services, urbanisation, the development of industrial and export processing zones, and agro-forestry and fisheries product processing also attracted foreign investors. The disbursement of foreign investment increased by 30 percent against 2006, reaching more than US$5 billion. 

2007 was also considered a successful year of the hi-tech sector, with a number of big projects getting off the ground. They include a US$100 million project invested by Jabil Circuit Inc. of the US in Ho Chi Minh City to assemble printed circuit boards, and two hi-tech projects worth US$80 million in total invested by Foxconn Group of Taiwan in northern Bac Ninh province. The Foxconn President has said that his group wants to be Vietnam’s biggest investor in the near future with a total investment capital of US$5 billion. 

Many localities attracted big investment projects from multinational groups, including a US$1.7 billion Vung Ro oil refinery in central coastal Phu Yen province jointly invested by the UK’s Technostar Management Company and Russia’s Telloil Company, and a US$500 million hotel-apartment project in Hanoi by the Republic of Korea’s Keangnam group.

Meanwhile, Vinh Phuc aims to become an industrial province in the northern region as it licensed a Taiwanese-invested US$500 million project to produce laptops, and a US$45 million to produce Piaggio scooters.

The Republic of Korea continued to top the list of 81 foreign investors in Vietnam, with 1,655 projects valued at US$11.5 billion, making up 22.7 percent and 16.4 percent of the country’s total invested projects and capital respectively since 1988. Apart from hi-tech sectors and services, RoK investors poured capital into real estate projects in the whole three regions of the country.

2007 also marked a breakthrough in India’s investment strategy in Vietnam. With an ESSAR group-invested hot-rolled steel project in southern Ba Ria-Vung Tau province and a TATA group-invested steel complex in central Ha Tinh province, India emerged as one of the top ten foreign investors in Vietnam this year. As a result, Vietnam became India’s biggest investment recipient in Southeast Asia.

Mr Thang says that the achievements were attributed to Vietnam’s reform efforts over the past 21 years of implementing the Doi Moi (Renewal) process and Vietnam’s recent admission to the World Trade Organisation.

To welcome new investment flows in 2008, Mr Thang says Vietnam should further improve its investment environment and, more importantly, use the capital effectively. In addition, investment promotion is considered an important factor in attracting more foreign capital. (VOV)