Smaller is better in FDI attraction

CA - With the advantage of easy deployment and quick returns, small-scale projects, especially in the services sector, have proven a popular channel for foreign direct investment (FDI).

As the national leader in FDI attraction, Ho Chi Minh City last year licensed 384 new investment projects and 115 projects applied for investment increases--a combined total of 1.3 billion USD.

A majority of them were small-scale projects operating in the services sector, reported the municipal Department of Planning and Investment.

The investment monitor added that small-scale projects also accounted for a large proportion of the more than 900 million USD disbursed in 2009. Meanwhile, major projects located in industrial, export-processing and hi-tech parks continue to see a slower rate of capital disbursement.

Real estate development has not yet shown signs of a rally from the impact of global economic crisis, making investors reluctant to pour money into property projects.

Economists have therefore forecast that small-scale investment in the services sector will continue to be the key trend among foreign players in the near future.

The Year of the Tiger, however, has brought with it initial signs of optimism, with commitment by several giants to either speed up the tempo of construction or deploy major projects shortly after Tet.

Most worthy of note are the 930 million USD project on the construction of the Vietnam Financial Centre by the Malaysian Berjaya Group in HCM City and a 4.1 billion USD multi-purpose entertainment-tourism project in the southern province of Ba Ria-Vung Tau by the US Winvest Investment Group.