FDI attraction, disbursement show signs of slowdown
Tuesday, November 06, 2012, 20:00 GMT+7
In the first ten months of 2012, the disbursement of foreign direct investment (FDI) inched down 1.1 percent year on year, while newly granted and raised FDI dropped 24.7 percent over the same period last year, according to a state agency.
FDI disbursement was estimated at $9 billion, equaling to 98.9 percent of the same period last year, according to Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.
As of October 20, Vietnam has attracted 881 newly-licensed FDI projects with pledged capital of $6.68 billion, down 36.7 percent year on year. In addition, as many as 359 ongoing FDI projects registered to raise investment capital by $3.8 billion, up 12.3 percent from the same period last year.
Totally, newly granted and raised FDI capital in January-October reached $10.49 billion, equaling to 75.3 percent compared to the same period last year.
According to previously released figures, in the first nine months of 2012, disbursed FDI capital was estimated at $8.1 billion while the pledged capital reached $9.526 billion.
As of August 20, disbursed FDI capital reached $7.28 billion and registered capital reached $8.47 billion.
Thus, in October alone, FDI capital disbursement reached about $900 million, rising about 9.8 percent from the figure of $820 million in September. Newly pledged and raised FDI capital reached $964 million, down 8.7 percent against the figure of more than $1 billion in the previous month.
Processing and manufacturing sector attracted the most attention of foreign investors with 374 FDI projects valued at $6.9 billion, accounting for 66.2 percent of the total investment capital in January-October
Real estate sector ranked at the second with eight projects worth $1.84 billion, accounting for 17.6 percent and followed by wholesale, retail and repairing sectors with 156 projects worth $455.8 million, accounting for 4.3 percent and then information and telecommunications sector with $402.3 million.
Among 52 countries and territories investing in Vietnam, Japan took the lead with $4.92 billion, accounting for 46.9 percent of the total FDI capital in Vietnam in January-October, followed by Korea ($936.7 million), and Samoa ($899.8 million).
So far, southern Binh Duong Province has attracted the biggest volume of FDI investment capital with $2.17 billion, accounting for 20.7 percent of the total investment capital, followed by Ho Chi Minh City ($1.12 billion), northern Hai Phong City ($1.08 billion), southern Dong Nai Province ($1.06 billion), Hanoi ($984.6 million), and Bac Giang ($925 million).
Some large projects licensed in the first ten months of this year included Japan’s Tokyu Binh Duong urban zone project ($1.2 billion), the expansion of Wintek Vietnam Ltd Co in the northern province of Bac Giang ($870 million), Bridgestone tire production project in Hai Phong ($574.8 million), and LIXIL Vietnam Global Production Co’s project in Dong Nai ($441 million).
With the new data on FDI attraction and disbursement, the Ministry of Planning and Investment is seeking effective measures to prevent the decline of direct foreign investment (FDI) in the country, Dau Tu newspaper reported.
FIA director Do Nhat Hoang has urged the government and authorized agencies to have effective and timely measures to stop the downward trend.
Vietnam attracted a record number of FDI with $71.7 billion 4 years ago, but it gradually fell sharply to $23 billion, $20 billion, and $15.6 billion in the next three years.
“This year, the investment ministry estimates that it will be very difficult to reach $15 billion in FDI, as there were only two months left before the end of the year. So, it was not easy to attract an additional $5 billion” Dau Tu newspaper quoted Hoang as saying.
Dao Quang Thu, deputy minister of Planning and Investment, also told Dau Tu newspaper that registered capital of FDI enterprises, particularly from South Korea and Taiwan, had decreased significantly.
Vietnam is no longer the top-ranking destination of Korean investors, having been replaced by Indonesia and Myanmar, according to Nguyen Minh Hien, investment counselor in South Korea.
The government has given the green light on a project to manage the cash inflow of FDI enterprises.
The project, drafted by the Ministry of Planning and Investment, aims at improving the investment environment, promoting and improving the quality and efficiency of FDI capital, enhancing the state supervision mechanism and setting a comprehensive legal framework on FDI inflow management.
Moreover, the project also sets specific targets to “improve the efficiency of inspection and monitoring of capital flows, in and out, building up a database on FDI flows to respond the requirements of the analysis in a timely and accurate manner, forecasting, policy-making and administration of the foreign exchange market, balance of payments stability, and increasing foreign exchange reserves are reasonable”, according to newswire Stoxplus.
