Proactively welcoming the fourth FDI wave

Entering its 33rd year of implementing the open-door policy to attract foreign capital, up to now, FDI inflows have become one of the important drivers of Vietnam's economic growth with a significant increase in theircontribution to GDP.

By the end of 2020, the whole country has 33,070 valid FDI projects with total registered capital of over US$384 billion, the implemented capital having reached US$231.86 billion, equalling more than 60% of the total registered. FDI is present in all 63 localities in the country and is invested in 19 out of 21 industries in the national economic sub-sector. The FDI sector accounts for a large proportion of total industrial production value and the total export value of Vietnam, and revenues to the State budget have steadily increased over the years.

However, along with the positive contributions, the limitations of foreign capital flows have also been clearly revealed. Of which, the biggest limitation is the low level of connection and spread of the FDI sector to the domestic investment sector; the attraction and transfer of technology from the FDI sector to the domestic investment sector not meeting expectations, and limitations in attracting FDI in a number of priority industries and sectors and from multinational corporations. In addition, there has been a phenomenon ofsome enterprises not strictly following the law on investment or regulations on environmental protection.

According to some economic experts, the impact of the COVID-19 pandemic is an opportunity for Vietnam to actively attract new generation FDI in a more selective manner, with quality, efficiency, technology and environmental protection as the main evaluation criteria. In order to catch up with the flow of the fourth wave of FDI taking place globally, Vietnam needs to be more adaptive, proactive and creative.

At the macro level, the Government will focus on solving a number of major issues. These are to maintain the stability of the macroeconomic, socio-political environment, a competitive advantage of Vietnam in attracting FDI; focus on improving the quality of institutions, policies and laws in order to implement the policy of foreign investment cooperation with priority and selection associated with the goal of improving competitiveness, building an independent economy and prioritising investment in infrastructural development.

At local level, it is necessary to organise and support effectively and promptly investors to build projects with the fastest speeds, the shortest times and the highest levelsof effectiveness through the reform of business and administrative procedures, especially procedures for land and land clearance, and so on.