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Foreign investment in healthcare sector stagnant

Update: February, 28/2013 - 07:35

Fortis Healthcare (India) buy 65% stakes of Hoan My Medical Group.— Source: dddn.com.vn

HCM CITY (VNS)— Foreign direct investment (FDI) for the domestic health care sector this year may remain at a standstill even though investors are making efforts to complete plans for projects that are overdue.

A staff member of the Viet Nam Foreign Investment Agency, who spoke on condition of anonymity, told Viet Nam News that she did not see any good signs for FDI in the sector this year.

She also said that the healthcare sector seemed to be less attractive to foreign investors, who have complained about difficult procedures and conditions.

She explained that the sector required an investor to put up at least US$20 million to open a new hospital and $2 million to open a new clinic.

"In current difficult economic times, this capital is not small," she said.

"There is now a big project invested in by Germany. The investors really want to implement it, but they may face many challenges because it is carried out under the public-private partnership scheme, which is quite new here."

A representative from the healthcare minsitry agrees with her assessment.

Tran Quoc Khoa, a staff member at the Ministry of Health told Dau Tu newspaper that investments in the healthcare sector are very large, and a long time is needed to recoup the money. Thus, investors must be well-experienced in managing their projects.

As a result, even after dozens of years of attracting FDI to the domestic healthcare sector, the country has only six hospitals with 100 per cent foreign investment, with a total capital of US$94 million, and more than 14,000 FDI-clinics, according to Khoa.

One investor, who declined to be named, said that many people like him preferred to invest in other sectors so they can get their money back sooner.

Moreover, the regulations about investment in this sector were unclear and varied in provinces and cities, he said.

In a report yesterday, the Dau Tu newspaper said that Ha Noi and its neighbouring provinces would see the opening of two FDI-hospitals in the first quarter.

However, plans for these have not been completed in a timely manner. In addition, many projects have faced challenges in meeting investment procedures and requirements.

Most of those were interviewed about the subject said that such investments were actually rather modest, especially considering the fact that many residents continue to spend huge amounts of money for healthcare services abroad and that demand has greatly increased. Despite this, there are still an insufficient number of high-quality hospitals. — VNS

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