HANOI: Vietnam’s Ministry of Industry and Trade (MoIT) Vu Huy Hoang recently discovered in a meeting based on analysis of Vietnam’s economy that Vietnam’s FIEs share of GDP and investment are going pretty positive as Vietnam has been highly successful at mobilizing inward foreign Investment (FDI) over the past few years.
Minister of Industry and Trade (MoIT) Vu Huy Hoang recently sat down with a VOV reporter for a wide-ranging interview on his theory of the state of Vietnam’s economy and how it stands coming into the New Year of the Goat. Inbound FDI has been the catalyst underpinning Vietnam’s economic reform. While FIEs share of GDP and investment may appear high at first blush, it really hasn’t created a problem.
To the contrary, foreign invested projects are largely conducted in the joint venture form of doing business. Therefore a portion the profits of FIEs inure to the domestic Vietnamese partner, which is a direct and immediate benefit to the nation.
Foreign investment also spawns technology advances for which currently Vietnam cannot afford. The evidence on technology spillover to the nation overwhelmingly supports that the government is on the right track with its policy of seeking high levels of FDI.
Advanced technology is a springboard that will drive higher labor productivity, which is so desperately needed if the nation is to be competitive as it integrates more deeply into the regional and global marketplaces.
In addition, increased labor productivity is the key to higher paying jobs for Vietnamese workers in the future and the wealth it brings with it will create a better standard of living for Vietnamese families.
This better standard of living directly will translate to more savings and investment that will be pumped by the Vietnamese people back into the nation’s economy in the future. The increased knowledge of new technology for Vietnamese workers is an invaluable resource for the nation.
In recent years, FIEs have been the salvation for the country having made huge contributions to Vietnam’s GDP and export growth and will continue to do so for the foreseeable future
Therefore, the MoIT and other relevant ministries have been implementing a series of measures aimed at securing more FDI. Obviously investment cannot increase indefinitely but for right now the nation needs to attract more foreign investors to do business in Vietnam.
The government has laid out in fairly substantial detail its objectives and orientations to entice and manage FDI for the period 2011-2020. In line with these guiding principles, Vietnam will continue to further advance socio-economic development for the benefit of the Vietnamese people.
Nevertheless, export growth of 100% owned domestic enterprises has shown positive signs. Domestic enterprises’ export growth rose by 1.2% in 2012 and 4% in 2013. The figure then went up again by 11.6% in 2014, with the total volume reaching US$49 billion.
