Vietnam seeks ways to boost FDI disbursements

CA - Policy adjustments, stricter penalties and infrastructure development will all help increase the pace of capital disbursement in foreign-invested projects in the country, ministry officials have said.

Experts from the Ministry of Planning and Investment’s Foreign Investment Agency and the Viet Nam Association of Foreign-Invested Enterprises said so at a conference on Tuesday in Vung Tau City.

The disbursement pace was still slow and unstable, they said.

For example, foreign-invested projects disbursed US$7 billion during the 1991-95 period, $13.5 billion in the 1996-2000 period and $14.3 billion in the 2001-05 period. But in 2006 and 2007, the disbursed capital stood at $8.7 billion and nearly $10 billion in 2009. Disbursement in the first five months of this year was $4.5 billion.

Experts attributed the sluggish pace to weak management in the localities where foreign invested projects are located.

Many local officials do not monitor FDI projects properly, and some of them have no information on the implementation of FDI projects.

In addition, many regulations relating to FDI project management have not been strictly applied, and there is still a lack of sanctions on projects that are behind schedule.

Experts also criticised several FDI-related regulations, saying that they are impractical and create obstacles for foreign investors to develop their projects. Some localities do not have the proper infrastructure for some FDI projects, and investors have found it too difficult to carry them out.

Limited capital sources in these localities is also another problem that contributes to delays, according to experts. Capital shortages prevent many localities from completing land clearance and allocating the land to foreign investors on time.

To address these shortcomings, ministry officials and other speakers said that current FDI policies must be reviewed to identify ineffective regulations that need to be amended. They also said stiffer penalties were needed for FDI project violations, and all possible sources of funding must be sought for infrastructure development. Ministry officials said they would cooperate with relevant sectors and local governments nationwide to solve problems facing foreign investors and hasten capital disbursement.

The ministry will also review all licensed FDI projects for effectiveness of implementation. Those that have been delayed or are not environmentally-friendly will have their licenses withdrawn. The ministry will also refuse to issue investment licences for FDI projects that have outdated technology and show signs of adverse environmental impact.

According to the Foreign Investment Department, the country’s economy has recovered significantly, and will continue this pace of growth for the rest of the year.

By July, Viet Nam had licensed as many as 11,759 FDI projects to investors from 91 countries and territories. They have a combined capital of VND187 trillion.