The disbursement of foreign direct investment (FDI) is still on track, though pledged capital has recently witnessed an inevitable decline given the gloomy global economic outlook and the ambition of Vietnam to raise capital quality, said a senior state official.
Registered FDI totalled $6.4 billion, and FDI disbursement reached $5.4 billion, in the first half of 2012, compared to $8.83 billion and $5.3 billion in 2011, and $10.5 billion and $5.4 billion in 2010, respectively, said Do Nhat Hoang, head of the Foreign Investment Agency (FIA).
The latest FDI disbursement figure, a 2 percent year-on-year increase, has signaled that disbursement appears to have remained stable over the past few years, which is fairly encouraging, particularly in the context of the global economic recession, said the chief of FIA under the Ministry of Planning and Investment.
However, the actualised FDI capital in June is estimated to have reached about $890 million, the lowest level in four months, creating a downward trend of monthly FDI disbursement.
Meanwhile, newly-pledged FDI capital in June is also estimated to be equal to the figure of the previous month, reaching approximately $1.06 billion.
However, the downward trend can also be seen in this figure, since it is the fourth drop in a row.
In the January-June period, the total newly-registered FDI capital is estimated to have reached more than $4.76 billion for 452 newly-registered projects, down nearly 25 percent in both volume and value year-on-year.
As many as 123 ongoing FDI projects have registered to add investment capital, exceeding $1.62 billion, equaling a half in volume of projects and about 64.5 percent in pledged capital over the same period last year.
Totally, Vietnam has attracted nearly $6.4 billion worth of newly-registered and raised FDI capital from the beginning of the year, down 27.3 percent year-on-year.
Notably, 100 percent of foreign invested enterprises (FIEs) accounted for 73 percent of FDI capital ($4.639 billion).
The manufacturing and processing industry sectors still showed the most attractiveness, with about 63 percent of the total pledged FDI capital, followed by real estate with nearly 25 percent, and the wholesale and retail and repairing sectors.
Japan took the lead amongst foreign investors in Vietnam with $4.159 billion invested in Jan-Jun, accounting for 65 percent of the total FDI attraction. It was followed by the British Virgin Islands, the Republic of Korea, Hong Kong and Singapore.
Binh Duong province attracted the most FDI capital, worth $1.788 billion, or 38 percent of the total in the first half of this year.
In the January-June period, the foreign-invested sector posted an export value of $32.7 billion year-on-year. It also recorded an export surplus of $4.7 billion.
Recently, the United Nation Conference on Trade and Development (UNCTAD) reported a 20 – 30 percent increase in FDI flows into Thailand and Indonesia over the first six months of the year.
However, Japanese and European investors now tend to head for destinations other than Thailand on concerns of political instability and remaining economic difficulties in the wake of the disastrous flooding of late 2011, said Hoang.
The manufacturing industry that attracted 64 percent of last year’s registered FDI is expected to account for 65.3 percent of that this year.
Similarly, the proportion of funding for agriculture has edged up from 0.4 percent in the previous year to 0.9 percent in H1/2012.
What is noteworthy is that the Japanese are pouring $1.2 billion into the Tokyu project in southern Binh Duong Province, which makes up around 20 percent of the total first-six-month registered capital of $6.4 billion.
Given the current conditions, the year target of FDI attraction could be within reach, and disbursement is projected to reach $10 billion, Hoang said.
According to a draft circular recently released by the Ministry of Planning and Investment, state authorities will check that foreign- invested enterprises and projects conform to investment licenses, development plans, and investment incentives, as well as regulations related to capital attraction, land use, ground clearance and compensation.
They will also check on matters such as taxation, capital contributions, project progress, wage mechanisms, treatment of workforce and environmental protection activities.