Foreign investors should choose the field that Vietnam is targeting

DNHN - Dr. Phan Huu Thang, a former Director of Foreign Investment, stated that under the pressure of the fourth industrial revolution of technology, the environment, and energy, investors should select the most appropriate investment direction.

In the context of many challenges, the numbers are remarkable.

Dr. Phan Huu Thang, former Director of the Foreign Investment Department (Ministry of Planning and Investment), shared with Business & Integration Magazine that Vietnam has just completed a 35-year journey to attract foreign investment and is entering the stage of foreign investment cooperation. To enhance the quality and efficiency of foreign investment capital flows, Vietnam's socio-economic development will be promoted.

Vietnam is regarded as one of the leading nations by the international community and has accomplished several significant accomplishments in attracting foreign investment. Vietnam will have attracted nearly 446 billion USD in foreign investment capital by the end of April 2023, of which nearly 280 billion USD will have been disbursed. Numerous multinational corporations utilizing modern technology are increasing their investment in Vietnam, thereby enhancing its quality and productivity.

By participating in 19/21 industries in the national economic sub-sector system, foreign-invested enterprises have contributed to encouraging domestic enterprises to innovate continuously, arouse the spirit of creativity and resonance, and stimulate the spirit of creativity and resonance. Internal strength, enhanced competitiveness, prompt seizing of opportunities and promotion of external resources, enhanced efficiency of investment cooperation, and creation of a significant economic growth engine.

Vietnam's registered foreign investment capital reached nearly $8.9 billion in the first four months of 2023, a decrease of only 17.9% compared to the same period last year, as opposed to 38.8% after three months. Investment capital through capital contribution and share purchase reached $3.1 billion, an increase of 70.4% compared to the same period in the previous year. In addition, the number of newly registered projects increased by 65.2% compared to the same period the previous year.

Foreign investors, including American, European, Japanese, and Korean investors, have expressed confidence in Vietnam's economic growth potential and efforts to improve the investment climate and business environment.

"According to the Ministry of Planning and Investment, the proportion of our realized capital has increased in recent years as a result of foreign investment. In the past, the average was typically greater than 50%; today, it exceeds 62%. "It is a good sign that both Vietnamese and foreign-invested businesses have actively fulfilled their obligations," said Thang.

The former Director of the Department of Foreign Investment believes that businesses are always responsible for their business investment activities as well as for society. Everyone, from businesses to individuals to state management agencies, is aiming to increase capacity, save production costs, and have the most appropriate solutions to deal with extremely erratic fluctuations in inflation, prices, and energy, as well as the impact of the international political situation.

"I have complete faith in the success rate of foreign investment (which accounts for over 62%). This is an impressive number given the current challenging circumstances. "Small projects take four to five years to complete, while large projects take ten years, so this percentage is high," Thang stated.

The connection between Vietnamese and foreign businesses is still very weak.

According to Mr. Thang, after 35 years of Vietnam's efforts to attract foreign investment, the link between Vietnamese and foreign businesses is still very weak. This is one of the negative aspects of Vietnam's foreign investment activities.

The demand for foreign investment in production capacity and input fuel supply is high, but the supply capacity, financial capacity, and capacity of Vietnamese enterprises are still inadequate due to the large number of small and medium-sized businesses. Meanwhile, state-owned enterprises have additional projects and responsibilities. We have not yet met the requirements of foreign businesses for the association.

"In the upcoming period, we hope to strengthen ties between Vietnamese and international businesses. Only by strengthening this will Vietnamese businesses be able to join the global value chain and their capacity will increase. From there, it is possible to participate in the production of new products and join the global value chain; achieve the goal of attracting foreign investment and constructing an independent economy," Mr. Thang emphasized.

Need a comprehensive and honest partnership

According to Mr. Thang, Vietnamese enterprises must strive to improve their production capacity, finances, technology, management experience, and international cooperation experience to forge closer ties with foreign companies. In the process of developing enterprises, especially private enterprises, it is necessary to have the support of State management agencies and the support of the society.

In contrast, foreign businesses must also commit to standing alongside Vietnamese businesses. Under the pressure of the industrial revolution 4.0 (pressure on technology and technology), investors should also choose the most appropriate investment direction that Vietnam is currently pursuing, as well as the global investment trend (environment, energy, etc.).

"Vietnam is eager to receive such investment projects and needs large investment projects with spillover effects to develop in the areas in which it is deficient. Thang stated that high technology, green investment, clean investment, and environmental protection cannot exist without ensuring national security.

Mr. Thang stated that it is a very positive development that a large multinational corporation like Samsung is actively investing in Vietnam.

Samsung has grown and expanded in Thai Nguyen, Bac Ninh, and Ho Chi Minh City in recent years. Its facilities of Samsung have made significant contributions to Vietnam's import-export ratio, state budget, and labor resources.

Samsung is a global corporation, supplying the entire world market as well as receiving the most important sources of supply in today's complex, unpredictable, and rapidly transforming international environment. Since it sources inputs from a variety of nations, Samsung continues to seek investment opportunities outside of Vietnam to reduce costs and provide the best products to the external market.

We anticipate collaborating with Samsung to maintain and expand its presence in Vietnam. Vietnam encourages and reminds them to fulfill their obligations in Vietnam, including supporting Vietnamese businesses, as they are well aware that Vietnamese businesses are still very small and have limited financial and operational resources.

"Samsung should reinvest a portion of profits earned in Vietnam to help Vietnamese businesses improve their quality." Thus, Vietnamese businesses can participate in Samsung's production chain, aiding Vietnam's gradual acquisition of the required technology to participate in this chain. This is a comprehensive and sincere partnership between Samsung and Vietnamese companies, according to Thang.

Hoai Anh