Experts: Vietnam yet to take full advantage of FDI

Last update 16:28 | 16/06/2017

Vietnam has not taken full advantage of foreign direct investment (FDI) while its private enterprises have failed to connect with the global production chain, heard the Midterm Vietnam Business Forum (VBF) 2017 held in Hanoi on June 16.

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Inside an automobile production plant in Vietnam

Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc, who is also Co-chairman of the VBF Consortium’s Management Board, said that there has been a poor linkage between foreign and domestic investors while the knock-on effect in terms of technology and labour productivity from foreign firms on Vietnamese firms remains limited.

According to a survey conducted by VCCI, the proportion of domestic businesses supplying commodities and services for FDI enterprises is pretty low. The Provincial Competitiveness Index (PCI) report in 2016 showed that only 14 percent of private businesses have customers that are FDI enterprises operating in Vietnam.

Less than 27 percent of FDI firms’ input materials were purchased from Vietnamese partners while a substantial amount was bought from other FDI companies. High-tech FDI enterprises tend to import input materials from their homeland.

The real situation was attributed to puny marketing policies, inefficient industry support programmes and domestic firms’ failure to provide supplies that meet standards in production management and quality of from FDI enterprises.

Loc said that improving the qualifications of human resources is the key to promoting FDI businesses’ effects on domestic enterprises.

Vietnam needs to mobilise all resources to better competitive capacity of private enterprises and the Government should realise policies to bolster the supporting industry, Loc recommended.

Tomaso Andreatta, Vice Chairman of the European Chamber of Commerce in Vietnam (EuroCham) and member of the VBF Consortium’s Management Board, expected further improvements in Vietnam’s business climate which help bring more practical effects to the business community. This will contribute to building mutual trust and support among private and FDI enterprises, he added.

Meanwhile, Jonathan Moreno, Chairman of the US Business Community in Vietnam, affirmed that reducing operating costs and simplifying business procedures will benefit Vietnamese firms, most of them are small- and medium-sized enterprises, thus enhancing the Vietnamese economy’s competitiveness edge.


This entry was posted in Economics - Kinh tế, Foreign Direct Investments - Đầu tư trực tiêp từ nước ngoài and tagged , , , by Trần Đình Hoành. Bookmark the permalink.

About Trần Đình Hoành

I am an attorney in the Washington DC area, with a Doctor of Law in the US, attended the master program at the National School of Administration of Việt Nam, and graduated from Sài Gòn University Law School. I aso studied philosophy at the School of Letters in Sài Gòn. I have worked as an anti-trust attorney for Federal Trade Commission and a litigator for a fortune-100 telecom company in Washington DC. I have taught law courses for legal professionals in Việt Nam and still counsel VN government agencies on legal matters. I have founded and managed businesses for me and my family, both law and non-law. I have published many articles on national newspapers and radio stations in Việt Nam. In 1989 I was one of the founding members of US-VN Trade Council, working to re-establish US-VN relationship. Since the early 90's, I have established and managed VNFORUM and VNBIZ forum on VN-related matters; these forums are the subject of a PhD thesis by Dr. Caroline Valverde at UC-Berkeley and her book Transnationalizing Viet Nam. I translate poetry and my translation of "A Request at Đồng Lộc Cemetery" is now engraved on a stone memorial at Đồng Lộc National Shrine in VN. I study and teach the Bible and Buddhism. In 2009 I founded and still manage on positive thinking and two other blogs on Buddhism. In 2015 a group of friends and I founded website CVD - Conversations on Vietnam Development ( I study the art of leadership with many friends who are religious, business and government leaders from many countries. In October 2011 Phu Nu Publishing House in Hanoi published my book "Positive Thinking to Change Your Life", in Vietnamese (TƯ DUY TÍCH CỰC Thay Đổi Cuộc Sống). In December 2013 Phu Nu Publishing House published my book "10 Core Values for Success". I practice Jiu Jitsu and Tai Chi for health, and play guitar as a hobby, usually accompanying my wife Trần Lê Túy Phượng, aka singer Linh Phượng.

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