Mr. Phan Van Quy (R), chairman of Pacific Corporation, signs an EPC Contract for the Vinh Tan Thermal Power Plant No 4

After 30 years of licensing FDI projects Viet Nam has 26,500 of them now. This represents remarkable success for Viet Nam’s open-door and integration processes.

Nguyen Si Dung, vice chairman of the Viet Nam - Japan Friendship Association and director of the Vietnam Mediation Centre, a division of the Viet Nam International Arbitration Centre, and former vice chairman of the National Assembly Office, shares a new perspective on attracting investment into Viet Nam.

What do you think about Viet Nam’s FDI attraction?

After 30 years of attracting FDI we have had US$ 334 billion from 129 countries and territories invested in 26,500 projects, with over $185 billion worth of capital brought in. This has contributed greatly to investment development, promoted economic growth.

FDI accounts for 25 per cent of gross capital formation and contributes 20 per cent of gross domestic products.

These achievements show that Viet Nam’s open-door policy is right and affirms the great contribution by industries, agencies and economic sectors to investment promotion.

Dr. Nguyen Si Dung

One of the main activities for attracting FDI is investment promotion. How do you see the role of promotion?

Investment promotion activities have an important role and involve the participation of many agencies and organisations to guide, advise and connect foreign investors for co-operation and investment opportunities in Viet Nam, including the Investment Promotion Centres (of the Foreign Investment Agency, people's committees of provinces and cities and Industrial Zones Authority); organisations and associations like the VCCI, Investors Association, Economic Cooperation Development Association, etc.

Besides, investment promotion programmes also attract the participation of foreign organisations based in Viet Nam, such as chambers of commerce and industry (Eurocham, CCIFV, KCCI, JCCI), trade-investment promotion agencies (KOTRA), trade organisations (JETRO, UBIFRANCE), and business associations (DBAV, INCHAM)

Investment promotion activities by these organisations help Viet Nam achieve positive results in FDI attraction over the years.

Looking at FDI enterprises in Viet Nam, there is still a lack of foreign small and medium enterprises (SMEs). What is your opinion about this?

That is right. In terms of a macro perspective, we have effectively implemented investment connection and promotion for large business entities. However, we have not done this for international small and medium-sized enterprises (SMEs) and individual investors, who are large forces with great potential to foster Viet Nam's economic development.

Some 30 years ago Viet Nam’s economy integrated from a low starting point. So we needed to focus on attracting large corporations and enterprises. In future we need to pay attention to attracting foreign SMEs to invest in Viet Nam. We have many advantages in attracting investment from these enterprises.

What is the key for us to exploit this segment?

In Viet Nam, investment promotion is organised at many levels and sectors, on different scales, in various fields, through methods such as organising and participating in trade fairs, exhibitions, seminars, and investment promotion meetings and sending trade promotion delegations to both domestic and international markets.

But the investment promotion activities are only the tip of the iceberg, leading to a mismatch between investment supply and demand.

Besides, the lack of support, connection and co-operation with investors after investment promotion and during the implementation of projects has caused hesitation among foreign SMEs who want to invest in Viet Nam. Thus, the key to attract investment from SMEs is to build the above connector model.

Is there any chance for private enterprises to enter the business of investment connection and promotion?

In the context that Viet Nam is integrating more and more deeply with the world market and signing more and more bilateral and multilateral free trade agreements, the opportunities to connect and promote investment will increase. This is a huge market available to all businesses and entrepreneurs.