Direct foreign investment does not merely mean benefits for Vietnam, as advantages are always followed by setbacks, officials said at a national conference to review the country’s 25 years of FDI attraction in Hanoi on Wednesday.

Vietnam has attracted nearly US$206.8 billion in 14,100 foreign projects over the last 25 years, according to a report by the Ministry of Planning and Investment.

However, only 5 to 6 percent of those FDI businesses have brought advanced technology to their Vietnam-based facilities, Deputy Minister of Planning and Investment Dao Quang Thu said.

Even worse, as many as 14 percent of the foreign investors use obsolete technology and equipment, and the remaining 80 percent deploy average tech, Thu said.

“There are many cases in which the FDI investors take advantage of the local law’s loopholes and weak management to bring outdated, pollution-causing technology and machinery to the country,” he said.

As of February 28, FDI disbursement topped $100 billion, out of the $211 billion registered, according to the investment ministry.

FDI exports accounted for more than 60 percent of the country’s total export value in 2012, and contributed an enormous $14.2 billion to the state budget between 2001 and 2010, and $3.7 billion in 2012 alone. The FDI businesses also generated jobs for 5 to 6 million local laborers.

“Attracting FDI is a right policy as it has contributed greatly to achieving many of the country’s important socio-economic development targets,” Prime Minister Nguyen Tan Dung told the conference.

Shortcomings

The government also acknowledged that the FDI sector still has a number of drawbacks.

“We need uniform and overall solutions for these issues,” the Prime Minister said, referring to the significant imbalance of FDI among various sectors, slow disbursement, and low content of modern  technology.

Vietnam only managed to attract some 100 of the world’s 500 leading multinational groups for investment, according to the investment ministry.

The country will thus continue improving its investment environment to lure more FDI and use the capital source efficiently, the Prime Minister pressed.

“Changes will come under the form of perfecting market mechanisms, reforming administrative procedures and financial and banking systems, and improving human resources training and socio-economic infrastructure,” Dung pledged.

He also asked relevant parties to offer generous incentives for large-scale socio-economic infrastructure projects, which are able to produce enormous, positive impacts on the country’s socio-economic growth.