Ba Ria-Vung Tau is the province that comes second, after HCM City, in attracting foreign direct investment (FDI), with 282 projects in operation, according to a survey carried out by the Central Institute for Economic Management.
The Institute announced the survey’s findings at a meeting with provincial officials to review the province’s effectiveness in attracting FDI.
The total registered capital of the 282 FDI projects in the province is 27.5 billion USD, 13 percent of all total investment registered in the country.
Most of the projects’ capital focus on the industrial and tourism sectors.
The FDI projects make a substantial contribution to economic growth and the province’s socio-economic development.
However, the province needs to overhaul several policies to create the best possible conditions for FDI projects to reach their maximum effectiveness.
Currently, the province does well in attracting FDI projects, but most only concentrate on sectors that require large amounts of capital and very few workers.
In 2010, 50 percent of FDI projects declared a loss of capital and only 33 percent of enterprises eventually made a profit.
Most of the projects are in assembly and processing with almost no transfer of technology involved.
In addition, very few FDI companies have any contact with domestic businesses.
The institute suggested that Ba Ria-Vung Tau province should set a maximum limit and avoid taking on heavy industrial projects.
However the province should not just rely on FDI projects, but work closer with the domestic private sector and develop supporting industries.