According to Dr Nguyen Quoc Viet, Deputy Director of the Institute for Economic and Policy Research (VEPR), continuing to reform institutions to improve a favourable, efficient and consistent business investment environment is still the most important factor for Vietnam to seize opportunities and attract FDI in 2023.
Dr. Nguyen Quoc Viet, Deputy Director of the Institute for Economic Policy Research (VEPR)
In the context of a difficult global economy, Vietnam is still an attractive investment destination for many foreign enterprises and corporations. In your opinion, what are the factors that make Vietnam attractive?
In my opinion, there are two factors - firstly, suppliers of famous global corporations like Apple have the desire to shift the value chain to Vietnam to balance unforeseen risks due to world geopolitical fluctuations or unforeseen changes in the policies of some countries.
Secondly, FDI enterprises already operating in Vietnam continue to expand their production and business scale, making additional and expansion capital accounts for a significant proportion. This shows the confidence of foreign investors in the Vietnamese market.
Along with China's reopening, what will Vietnam be affected by the wave of FDI capital movement, Sir?
Besides opportunities, attracting FDI in the coming time is forecasted to be more difficult due to many pressure factors.
When China decided to live with the Covid-19 pandemic, opening the economy will keep foreign corporations boosting production activities. In ASEAN, Vietnam is under competitive pressure to attract FDI with a number of countries such as Singapore, Indonesia, and Thailand. These countries have made good use of the ASEAN Free Area Agreement to develop a number of industries in green and sustainable direction, creating certain strengths in attracting FDI.
In terms of markets and policies, the above countries are very open in business environment, especially investment procedures are carried out quickly and conveniently with investment trends in key fields and new fields.
For example, Indonesia is attracting many investment projects in the production and assembly of electric cars for domestic consumption and export. In addition to the above competitive pressure, new registered FDI has decelerated in the global since the end of last year due to the economic recession, which is an objectively unfavourable factor creating challenges for the economy.
So, in your opinion, what should we do to seize opportunities and attract FDI in 2023?
Continuing institutional reform to improve a favourable, efficient and consistent business investment environment is still the most important factor. Reform solutions include ensuring property rights, reforming business conditions, amending regulations on investment, land, construction and improving the effectiveness and efficiency of policy implementation. The focus on financial market reform must quickly attract and effectively use capital.
With the development of technology, we need to have policies to attract and select quality FDI projects into high-value fields and towards sustainable development and green economy. At the same time, focus on training human resources with vocational skills and technology mastery, promoting strong digital transformation to be ready to attract large technology corporations.