Vietnam PM sets up task force to prepare for new FDI wave

Prime Minister Nguyen Xuan Phuc has agreed to set up a task force that will help the country prepare for new wave of foreign direct investment (FDI) inflows in the post-Covid-19 period.

Prime Minister Nguyen Xuan Phuc has agreed to set up a task force to prepare for new wave of foreign direct investment capital inflows in the post-Covid-19 pandemic period.

While foreign investors consider Vietnam a safe investment destination, given the country’s effective handling of the Covid-19 pandemic, more work needs to be done to attract large-scale investments by multinationals, Phuc said at a government meeting on May 22.

Economists identified four sectors namely IT and hi-tech, electronics, e-commerce and logistics, consumer products and retail, for which investors are looking for alternative investment locations.

So far, governments around the world have offered incentives related to taxes, land, as well as measures to resume global supply chains and address labor shortages.

According to experts, investors are looking for predictable legal environment, government leaders thay stay true to their commitments and faster decision-making processes.

For Vietnam, a FDI task force is necessary to promote investments in the country, which can be done by approaching potential investors looking for new destinations and supporting those who are having difficulties in Vietnam.

A representative of the Ministry of Planning and Investment (MPI) said multinationals are diversifying their investment strategy and relocating production facilities. In fact, major investors are choosing Vietnam for their future projects.

The MPI said, the issue, however, is that Vietnam should select projects with advanced technologies, environmentally-friendliness and high added value, among others.

PM Phuc said there would be no success without a focus on investment for development, including domestic and foreign-invested projects.

The successful containment of the Covid-19 pandemic is just the first step, as the country is now shifting its priority to economic development, Phuc added.

In this context, it is essential for Vietnam to take advantage of a shift in global investment capital flows, focusing on major corporations standing at the top of global supply chains, Phuc stressed.

Addressing bottlenecks in infrastructure, human resources

As Vietnam remains a developing country with incomplete infrastructure and legal framework, Phuc requested agencies to utilize the existing strengths and move away from the old mindset to stay ahead in the race for international investment capital.

According to Phuc, government agencies, provinces and cities should meet demands of foreign investors, so that an investment afterwards would be beneficial to all parties involved.

Above all, Vietnam should be able to offer competitive incentives to potential investors and remain selective in looking for FDI.

For the time being, Vietnam would give priority to addressing bottlenecks in the country’s investment environment, including the infrastructure network and quality of human resources.

In addition to high quality FDI projects, Phuc urged government agencies to continue creating favorable conditions for other economic sectors, especially the private ones in doing business.