There has never been such a good opportunity to attract FDI capital as today

VCN – Professor Nguyen Mai (photo), former Deputy Minister of Planning and Investment Ministry, gave an interview with Customs Newspaper.

there has never been such a good opportunity to attract fdi capital as today
GS. Nguyen Mai, former Vice Minister of MPI

With some investors considering moving production to Vietnam, how should we take advantage of this opportunity?

I really enjoy the saying of General Secretary and President Nguyen PhuTrong: “This is a once-in-a-lifetime opportunity”. This comes from two factors.First, it is the change of the world after the Covid-19 pandemic, especially with the US-China relationship very tense, along with that, the relationship ofChina – The EU, China and South Korea, Japan are also very tough, which means the world is changing rapidly, what we are most interested in in the post-pandemic phase is to study the changes of the world and its impact on Vietnam related to FDI.

After the pandemic, many businesses in the world stopped operatingtemporarily, or went bankrupt.This will have an impact on Vietnam because international businesses will change their enterprise structures and international strategies. How will the new strategies of the US, China, the EU, and the big economic groups of the world change? Is Vietnam the market they are targeting or arethey targetingIndonesia or India? In addition, we must re-evaluate the impact of trade deals ​​like EVFTA after the pandemic to make policies, because it is not as easy as before the pandemic. The wave of businesses moving from China to third countries is existing; in fact Apple has announced they would move from China to Vietnam and produce 30% of wireless headsets in Vietnam for export. So we are not talking about opportunities anymore but beingexisting.

Secondly, the story directly responds to and extinguishes a pandemic is related to economic recovery. The PM requested unanimity for the economy to grow 5% or more, thus proving the economy’s resistance is still large. This is the new strength of Vietnam, creating a great opportunity that is “now or never” and we must take advantage. This is an opportunity for Vietnam to break through and accelerate to shorten the time to realize the aspiration for prosperity.

In the context that other countries in the region are preparing conditions to attract investment after the Covid-19 pandemic, what advantage does Vietnam have compared to these countries?

I think we have begun to prepare for waiting FDIcapital post-Covid-19 pandemic, but we need to do it faster. Recently, India announced that it will receive 1,000 large economic groups to move factories from China and declared it would reserve enough land and give them incentives. Indonesia also announced the establishment of its first 400-hectare industrial park to receive businesses from China. For Vietnam, the Government is assigning the MPI to develop a new generation FDI attraction scheme. I hope we do it quickly to catch this wave.

Compared to India and Indonesia, the two countries that are competing with us in attracting FDI, we have three advantages over them. Firstly, Vietnam’s position is closest to China, if shifting investment, FDI enterprises will not have to move much. Besides, in recent years, Vietnam has become a base for producing smartphones and tablets of Samsung. This is a great advantage. Secondly, we have the ASEAN community, the ASEAN investment agreementandthe FDI investor in Vietnam is the investor in ASEAN. This is a market of 650 million people, larger than the EU market and a total GDP of nearly US$4 trillion. FDI investors will have a great advantage when approaching the ASEAN market of 600 million people. Third, Vietnam has a great advantage in political security and economic security, after the pandemic, the successful control of Covid-19 soon giving us an advantage over other countries. Thus, the opportunity compared with competitors is quite clear, the remaining problem is whether we can take advantage or not.

there has never been such a good opportunity to attract fdi capital as today
Vietnam has a high quality workforce meeting FDI enterprises’ requirements

How should Vietnam take positive actions to welcome the post-Covid-19 FDI inflows?

I propose some solutions as follows.Firstly, Vietnam must declare to the world’s big economic groups early that we are ready to receive investment projects. We have more than 350 industrial parks (IPs) and 17 economic zones (coastal economic zones), until now half of the land area is empty, in these IPs, EZs are relatively good infrastructure andconvenienttraffic links. We have to re-inventory unused land, directing localities to reserve enough clean land for major projects. We have an advantage over China as the current rental price of our clean land is only 40% of the rent in Beijing and Shanghai. I believe this is very attractive to foreign investors.

Secondly, what foreign investors are most concerned about when investing in Vietnam is the lack of high quality human resources. I think this is not true. The fact that Samsung is using a lot of high-quality Vietnamese labour, and its leaders assess that Vietnam’s labour productivity is approximately equal to that of Korea’s, while the wages of Vietnamese workers only equal to 40-50% of Korean workers’ wages. Currently, 1,650 Vietnamese software engineers working at Samsung are highly appreciated. I affirm Vietnam’s high-quality human resources meet the needs of FDI enterprises. The link between training schools and businesses has grown a lot, graduates have jobs immediately and the level of proficiency has increased greatly compared to before.

Thirdly, many people worry that Vietnam has attracted FDI for a long time, which will make Vietnam a dumping ground in the world. Previously we had a circular regulating the import of old equipment and machinery, but I objected, because doing so is blocking the path of importing necessary equipment at low prices for businesses. In this case, it is suggested the Government does not think enterprises leaving China to Vietnam are carrying old equipment to catch enterprises to declare, so we cannot compete. Therefore, when FDI enterprises move factories from China, I think they should approve for enterprises to invest, when there is doubt about environmental pollution or labour safety we will come to inspect and handle. By doing that, we show investors a friendly attitude and protect the interests of businesses.

Finally, investors from China come to Vietnam and have to do quick procedures to produce, no one waits for months, even a year, a few years to complete procedure. The countries in the world doing very quickly as I mentioned above, if we take five or seven months to complete issuance of licenses, take investors’ time, no one will enter Vietnam to start investment. Here, administrative reform needs to be done closely and seriously.

What is the solution to keep the attraction of FDI in Vietnam, sir?

First, for attracting FDI investment in Vietnam, weneed to recover the economy quickly after thepandemic. In Vietnam, the businesses that suffered the most damage were aviation, transportation and tourism businesses. It is good that after social distaning, tourism has stimulated demand andrestored the market. We have to restore, synchronously renovate the economy, moving to a digital economy and digital government to move quickly towards modernisation.

there has never been such a good opportunity to attract fdi capital as today FDI enterprises preparing for life after pandemic

Besides, in selection of investment projects, it is time for us to have the opportunity to choose not to spend projects that domestic enterprises are strong enough to make for FDI enterprises. If these fundamentals are clarified, the source of FDI into Vietnam is certain.This year, FDI is expected to reach $20 billion of implemented capital, lower than $22 billion of last year. If FDI disbursement has a change in quality, it certainly will get higher efficiency. In 30 years of attracting FDI, there has never been such a good opportunity. The problem is that the capacity of the State management apparatus in attracting and supportingFDI must be effective. At the same time, administrative procedures must be simple and transparent, how to minimize corruption and harassment of FDI enterprises.

By Thu Hien /Quynhlan

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