FDI disbursement accelerates in HCM City

The Ho Chi Minh City Planning and Investment Department reported the
city’s nine-month FDI disbursement hit 900 million USD, almost matching
the amount for the whole of 2009, but still only a small amount
compared with total FDI flow.

The yearly target of
1.43 billion USD is clearly within reach, however total FDI disbursed is
only 11.9 billion USD out of the total registered FDI of 28.4 billion
USD.

Projects operating in the HCMC City Export
Processing and Industrial Zone Authority (HEPZA) recorded the highest
FDI disbursement speed. HEPZA’s 479 valid projects have disbursed 82
percent of the total 2.8 billion USD registered, according to Nguyen Tan
Phuoc, Vice Head of the HEPZA authority.

In the new
Thu Thiem Urban Zone, three out of four licensed projects have been
kick-started, including a 120 million USD project to build 2,220
apartments in Binh Khanh ward, District 2.

The
Planning and Investment Department’s Deputy Director Lu Thanh Phong said
that slow disbursement is usually seen in large-scale real estate
projects that face obstacles in ground clearance and administrative
procedures.

The department and relevant authorities
have been adjusting and removing unnecessary procedures in order to
facilitate investment projects.

The city has also been
assessing large-scale real estate projects to find out reasons for
delay and is determined to withdraw licences from projects that cannot
provide sound reasons for long delays.

Recently, the Ministry of Planning and Investment decided to stop 34 projects in HCMC due to their slow progress./.

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FDI flow turns to processing, manufacturing

Foreign direct investment (FDI) in the first eight months of this year has seen changes with about 57 percent of the total registered capital of US$11.5 billion focused on processing and manufacturing technology and production.

The processing and manufacturing technology sectors are magnets for foreign investors, with total registered capital of about $3.7 billion for 265 newly-licensed projects and 102 expanded others in the first eight months of 2010, after a standstill during the 2006-2009 period.

Noteworthy are large-scale projects such as the Hai Duong thermal electricity plant with registered capital of $1.6 billion by Malaysia’s Jacks Resources, the Quang Ninh thermal electricity plant capitalised at $2.1 billion by the AES-TKV Mong Duong Electricity Co. Ltd, the $1 billion Vietnam Kobelco Steel Company in Nghe An province, and the $360 million Posco SS-Vina Company in Ba Ria-Vung Tau province.

The positive change is the biggest difference in FDI structure compared with the same period last year. According to the Ministry of Planning and Investment’s Foreign Investment Agency (FIA), FDI in accommodation services accounted for nearly 45 percent of the total registered capital of $13 billion in the first eight months of 2009, and the proportion was reduced to 23 percent in the comparable period of 2010.

The change of FDI flow in Vietnam is attributed to global and domestic economic recovery and the government’s macro-economic management policy, experts said.

However, the change has not helped reduce the country’s trade deficit, excluding exports of crude oil.

According to FIA statistics, although January-August exports from the FDI area rose, its trade deficit reached $1.7 billion, accounting for 19.7 percent of the country’s total trade deficit.

The country’s FDI attraction policy needs to consider both the target for development of for-export production and the competitiveness of domestic investment flow, according to James Riedels, economist of the USAID/STAR-Vietnam Technical Assistance Project.

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FDI flow turns to processing, manufacturing

Foreign direct investment (FDI) in the first eight months of this year
has seen changes with about 57 percent of the total registered capital
of 11.5 billion USD focused on processing and manufacturing technology
and production.

The processing and manufacturing technology
sectors are magnets for foreign investors, with total registered capital
of about 3.7 billion USD for 265 newly-licensed projects and 102
expanded others in the first eight months of 2010, after a standstill
during the 2006-2009 period.

Noteworthy are large-scale projects
such as the Hai Duong thermal electricity plant with registered capital
of 1.6 billion USD by Malaysia’s Jacks Resources, the Quang Ninh thermal
electricity plant capitalised at 2.1 billion USD by the AES-TKV Mong
Duong Electricity Co. Ltd, the 1 billion USD Vietnam Kobelco Steel
Company in Nghe An province, and the 360 million USD Posco SS-Vina
Company in Ba Ria-Vung Tau province.

The positive change is the
biggest difference in FDI structure compared with the same period
last year. According to the Ministry of Planning and Investment’s
Foreign Investment Agency (FIA), FDI in accommodation services accounted
for nearly 45 percent of the total registered capital of 13 billion USD
in the first eight months of 2009, and the proportion was reduced to 23
percent in the comparable period of 2010.

The change of FDI flow
in Vietnam is attributed to global and domestic economic recovery and
the government’s macro-economic management policy, experts said.

However, the change has not helped reduce the country’s trade deficit, excluding exports of crude oil.

According
to FIA statistics, although January-August exports from the FDI area
rose, its trade deficit reached 1.7 billion USD, accounting for 19.7
percent of the country’s total trade deficit.

The country’s FDI
attraction policy needs to consider both the target for development of
for-export production and the competitiveness of domestic investment
flow, according to James Riedels, economist of the USAID/STAR-Vietnam
Technical Assistance Project./.

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