FDI inflow helps Vietnam modernize technology
Updated : Wednesday, October 03, 2018 11:29 AM (GMT+0700)

Theinflow of foreign direct investment (FDI) has helped Vietnam access advancedtechnology in the world, said Director of the Foreign Investment Agency (FIA)under the Ministry of Planning and Investment Do Nhat Hoang. 

 
Workers make electronic components at Manutronic Vietnam JSC in Bac Ninh province's
Tien Son industrial park - Photo: VNA

The official said the entryof FDI has stimulated domestic investment, and the development of foreign–invested firms along with other economic sectors has enabled Vietnam toperfect its socialist-oriented market economy and integrate deeper into the worldeconomy. 

The FDI inflow also assistedVietnam in restructuring its economy, accessing and applying modern technologyand advanced business administration. 

So far, a total of 334billion USD has been committed for 26,500 projects in Vietnam of which 184billion USD has been disbursed. Vietnam’s economic structure has also shiftedfrom mainly backward agriculture to advanced industrial production. 

The foreign-invested sectorcontributed 58.2 percent of the processing-manufacturing industry and 50 percentof the country’s total production value, while creating direct employment for3.6 million workers and indirect jobs for more than 5 million others. 

The presence of FDI firmshas changed the landscape in many regions. For example, the southern provincesof Dong Nai and Binh Duong, previously poor agricultural areas, have turnedinto industrial hubs thanks mainly for FDI firms. Those two provinces are alsoamong the leading localities in attracting FDI. 

However, despite itspositive influence, the FDI sector has not met expectations in technologytransfer for their local counterpart. The sector also contains problems such astransfer pricing and tax frauds. A number of FDI enterprises still use backwardtechnology and cause environmental pollution. 

“I think the lesson here isto attract investment in a selective way, choosing projects using modern andhigh technology, consuming less energy, optimizing natural resources and notcausing pollution”, Hoang said. 

He added that Vietnam needsto make optimal use of foreign capital and technology by adopting appropriatepolicies to facilitate linkages between foreign-invested and domesticenterprises. 

In the context of the fourthindustrial revolution, in order to attract leading investors in the field of informationtechnology, Vietnam should review its legal framework, especially regulationson the hi-tech sector, while taking measures to assist domestic firms inupgrading their technology, the FIA director said. 

According to Hoang, hisagency has been assigned by the Ministry of Planning and Investment to reviewthe Investment Law and the Law on Enterprises, with the aim of removingoverlapping between the Investment Law and other laws, and abolishingunnecessary conditions in accessing market and doing business.

Source:VNA

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