From the early days of seeking foreign direct investment (FDI) to ensure basic production and meet the needs of survival, the narrative of attracting FDI has now entered a new chapter in Vietnam as the country transformed into a dynamic economy, deeply integrating into the global market.

At the age of nearly 75, Phan Huu Thang, the first head of the Foreign Investment Agency at the Ministry of Planning and Investment, remains full of energy when speaking about FDI attraction. 

As the chairman of the Vietnam Industrial Park Finance Association, he enthusiastically discussed the ongoing projects.

He shared that the biggest challenge was attracting investors, particularly in green finance and high-tech sectors, to industrial parks. 

Reflecting on nearly four decades of FDI attraction efforts, Thang recalled a journey filled with caution and persistence. 

When the first industrial park was opened in Dong Nai Province, southern Vietnam, officials and leaders worked tirelessly, even going as far as setting up furniture in offices. The excitement was palpable.

Initially, only two cities – Hanoi and Ho Chi Minh City – had projects approved with a total capital of US$40 million, while other provinces had approvals for projects with a $10-million capital. 

Over time, more provinces joined the race, with approvals often granted within a week, especially for smaller-scale projects, Thang recounted.

New era of FDI

Having undergone nearly four decades, Vietnam is now considered one of the top 16 most successful emerging economies in the world. 

The Southeast Asian country is entering a new era of strength, with the nation poised to take its place on the global stage.

Thang expected the Politburo’s Resolution No. 50, which shifts the focus from simply attracting FDI to fostering cooperation, to help elevate productivity, quality, and economic restructuring.

“Attracting investment is a passive process, simply inviting or even gathering capital, but cooperation is a win-win approach," he explained.

“If we succeed, we can leverage the advantages of FDI while addressing internal challenges to build a self-reliant, independent economy.”

To ensure effective cooperation in the current situation, the first priority is safeguarding capital, creating a favorable business environment, establishing stable policies, and boosting the growth of domestic enterprises.

Thang recalled a story of attracting Intel to Vietnam as a key lesson. 

Nearly two decades ago, an investment attraction team was small but powerful, consisting of then-Deputy Prime Minister and Minister of Foreign Affairs Pham Gia Khiem, a deputy minister of science and technology, the then-secretary of the Ho Chi Minh City Party Committee, the president of the Vietnam Chamber of Commerce and Industry, and the head of the Foreign Investment Agency. 

Intel was considering three locations for its $1-billion investment, including India, Thailand, and Vietnam.

Though Vietnam was at a disadvantage compared to the two others, what ultimately persuaded Intel to choose it were the country's favorable conditions, including location, workforce, incentives, and most importantly the trust and determination shown by the leadership. 

With this strong commitment, coupled with Vietnam's potential, Intel decided to establish its factory in the Saigon Hi-Tech Park in Ho Chi Minh City in 2006, where it has operated ever since.

Strong domestic business network is a need

According to Thang, despite FDI contributing 25 percent of total investment, it accounts for a staggering 70 percent of exports. 

Vietnam has yet to build up a sufficient number of capable domestic enterprises to deeply join global supply chains.

To attract more giants in the technology, semiconductors, artificial intelligence, and the Internet of Things fields, the investment environment needs further refinement by reducing barriers and increasing transparency, along with a strong network of domestic companies.

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