Vietnam urged to focus more on dynamic advantages to attract FDI
Vietnam must make more use of dynamic rather than static advantages to improve its efficiency in FDI attraction, said Dr. Dinh Trong Thang from the Central Institute for Economic Management (CIEM) on November 30.
Hanoi (VNA) – Vietnam must make more use of dynamic rather than static advantages toimprove its efficiency in FDI attraction, said Dr. Dinh Trong Thang from theCentral Institute for Economic Management (CIEM) on November 30.
The country has reliedheavily on static advantages, like low costs in terms of labour, land andnatural resources, to lure FDI but these resources are finite, Thang told aworkshop reviewing the efficiency of Vietnam’s FDI attraction policies co-heldby the CIEM and German Development Cooperation Agency (GIZ) in Hanoi.
Resources for investment are veryimportant, said CIEM President Nguyen Dinh Cung, adding that if the issue isoverlooked, it is not only the investment that is wasted but resources couldalso become depleted.
Thang added that Vietnam should attract FDIin a more proactive manner which must base on strengths and weaknesses of eachcity and province so each of them would develop different ways to enhance theirFDI attractiveness. It is essential to achieve consistency among investmentattraction goals, priority investment portfolio and measures to promote andattract investment, he said.
He further emphasised that the countryneeds to provide firms incentives based on their business performance so as towelcome more long-term and effective projects.
Le Thuy Trung, DeputyDirector of the Ministry of Planning and Investment’s Department of IndustrialEconomy, said that current investment policies have failed to produce expectedresults. For example, the local automobile industry has been mainly built onassembly of parts with dearth of technology transfer.
Similar trend is seenin the electronics, garment-textile and footwear sectors. In electronics, localcontent only accounts for 10 – 20 percent of the products while ingarment-textile and footwear sectors, which are Vietnam’s key currency earners,most of materials have to be imported, leading to low added value.
Trung suggested thatthe country should exert more efforts to encourage use of advanced and cleantechnologies and technology transfer, and these need to be incorporated intolaws. –VNA
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A view of the workshop. (Photo: VNA)
