Deputy Director of the Foreign Investment Agency under the Planning and Investment Ministry Dang Xuan Quang speaks to Tin Tuc (News) newspaper about Viet Nam's struggle to attract foreign direct investment.
What are the achievements and shortcomings of Viet Nam in attracting FDI in recent years?
Viet Nam's preferential policy was successful in attracting FDI in industry, making up 50 per cent of the total FDI capital.
We have failed to attract investment in three fields. The first is attracting investment in difficult areas despite offering strong preferential policies. These areas include the northwestern, northeastern and Central Highland regions and some others. Secondly, we also failed to attract investment in high-technology areas. Thirdly, there was a low rate of investment in agriculture.
Meanwhile, the investment in real estate has increased rapidly despite no priority being given for that sector. Thus, we may say, investment priorities cannot be compared to other factors, though investors have said that priorities were very important for them.
What are the main barriers to attracting investment in Viet Nam?
There are three shortcomings. Firstly, the infrastructures in transport, electricity and water are not synchronised, affecting the ability to absorb capital sources and draining other resources. Secondly, the unavailability of highly skilled human resources is a barrier. Thirdly, there are limited support industries.
What can we do to improve the investment environment?
Many organisations such as the International Monetary Fund, the Japan International Co-operation Agency and the World Bank said that the role of investment incentives was quite important. Given a choice of similar investment conditions, an investor would go to areas with more incentives. Enterprises that have been given investment incentives tend to expand their investment.
Viet Nam is in a hurry to revise the laws on investment and enterprises. Instead of giving licences to investment projects which follow traditional ways, we will negotiate with each big project for investment incentives in compliance with the law.
Incentives will be given with closer supervision, and investors who violate the law would be punished. In addition, priority will be given to controlling investment licences and limiting unhealthy competition or the incentives given by provinces.
Licences for investment would be considered carefully, in which high-quality projects would be given priority and we will have to learn ways to refuse poor-quality projects. — VNS