Poor infrastructure, legal problems hold up FDI

Removing legal inconsistencies and creating conditions to widen investment areas are among important measures needed to sustain the inflow of foreign direct investment (FDI), experts said.

Other measures include the rapid development of infrastructure and improving the quality of human resources as well as the local investment environment, they told the Thoi Bao Tai Chinh Viet Nam newspaper.

According to the Ministry of Planning and Investment’s Foreign Investment Department, between 2006 and 2008 the country’s total registered FDI went up to US$97.6 billion, exceeding the target set for the period by 77 per cent.

From 2006 up to now, FDI projects worth $27.6 billion have been implemented, accounting for 110 per cent of the target set for the 2006-10 period.

Between 2006 and 2008, FDI enterprises created employment for 370,000 people and contributed $5 billion to the State Budget. While recognising such tremendously positive results, deputy director Phan Huu Thang of the Foreign Investment Department stressed the domestic investment environment still had many problems that required to be settled soon to ensure the stability of FDI flows as well as the effective use of these capital sources.

Inconsistent regulations on investment and planning, poor infrastructure, and costly and lengthy land clearance and compensation processes were leading issues, Thang said.

Seven new measures

The Government in June issued a decision requiring ministries, branches and localities to implement seven sets of measures urgently to attract more FDI in the coming time.

Most of them focused on upgrading infrastructure facilities, developing human resources, and improving State management of foreign investment activities.

Thang and many other economists have said that to implement all these measures effectively, ministries and other agencies, particularly the Ministry of Planning and Investment and local departments, must review policies relating to investment and business activities and amend outdated and inconsistent ones.

They also stressed the need for preferential policies to stimulate foreign enterprises to invest in capital-thirsty areas like technical infrastructure development, social housing construction and projects in agriculture and rural development.

Industries and localities should make full use of various capital resources, particularly non-State ones, to invest in the development of major infrastructure projects including water supply and drainage, environmental sanitation, bridges, highways, railways, seaports, new materials production and post and telecommunications, Thang said.

The Government should also call for foreign investors to invest in the education and vocational training sector to increase the country’s proportion of trained workers to 40 per cent. Priority in this endeavour should be given to industries that lack labour.

“Simplifying administrative procedures is also an urgent task,” Thang said.

Viet Nam News

Tags: invest in Vietnam, Vietnam FDI, Vietnam investment