The signing ceremony on Saturday. IFC will support Ha Noi to formulate a new-generation FDI strategy to attract high-quality foreign capital and diversify its funding sources. — Photo courtesy of IFC

International Finance Corporation (IFC), a member of the World Bank Group, on Saturday signed a memorandum of understanding (MoU) with the People’s Committee of Ha Noi to support its efforts to attract new-generation foreign direct investment (FDI) and diversify its funding sources.

Under the MoU framework, IFC will work with Ha Noi to formulate a new-generation FDI strategy in response to the Government’s master plan of foreign investment promotion over the next 10 years.

Where possible, IFC will also assist Ha Noi in diversifying its funding sources. The overall effort will leverage IFC’s global network of clients and partners, with benefits to potential key sectors including financial markets, infrastructure, logistics, and health and education.

To sustain robust socio-economic development, Ha Noi aims to attract higher-quality streams of FDI. This will support the city’s strategy of developing high-tech and high value-added industries, increasing local sourcing, and creating more and better jobs.

“Strategic FDI as guided in the Politburo’s Resolution No 50/2019 on orientations to finalise policies and mechanisms to promote FDI quality and effectiveness toward 2030 plays an essential role in sustaining Ha Noi’s sustainable economic and employment growth and in realising its industrialisation and modernisation plan toward 2030,” said Nguyen Duc Chung, chairman of the Ha Noi People’s Committee.

“We welcome IFC’s support in developing a new investment strategy and diversifying funding sources as well as mobilising quality investors through its global network.”

As one of the fastest growing cities in Asia, Ha Noi accounts for one-fifth of Viet Nam’s gross domestic product (GDP). Last year, the capital city attracted US$8.45 billion in FDI, the highest among the country’s 63 cities and provinces. The FDI capital flow was highest in three areas including property development, processing and manufacturing, and telecommunication and information.

Kyle Kelhofer, IFC Regional Manager for Viet Nam, Cambodia, and Lao PDR, said: “Ha Noi already possesses many key factors that are attractive to higher quality FDI. The current environment of global supply chain changes — as a result of the COVID-19 pandemic — provides a good opportunity for the city to further prioritise FDI inflows in line with its development strategy.

“This includes FDI with increased local value-addition, with increased technology focus, to strengthen foreign-local firm linkages and help enhance local supply chain opportunities, foster improved job opportunities, and boost the overall competitiveness of the city.”

Promoting private sector development, IFC has been supporting Viet Nam to improve business competitiveness and attract international investors over the past two decades.

Recently, IFC worked with the Ministry of Planning and Investment on recommendations for Viet Nam’s new national FDI approach. It is also helping Vietnamese manufacturers improve capacity and supply to multinationals through a pilot Viet Nam Supplier Development Programme. — VNS