VietNamNet Bridge – Economists have pointed out that Vietnam has to pay a heavy price for attracting foreign direct investment (FDI). Meanwhile, it can be choosier in the issue and only select the most suitable projects for itself.
Nguyen Mai, Chair of the Foreign Invested Enterprises’ Association VAFIE, posed a question at a recent workshop on FDI review that why the transfer pricing problem of FIEs has not been settled, while the problem was discovered many years ago.
A lot of other questions about FDI management have also been raised recently. Why hasn’t Vietnam given overall assessments about the real situation of the technologies brought by FIEs? Meanwhile, the backward technology utilization has been warned by many experts, who considered this one of the biggest problems for now.
Why hasn’t any considerable improvement been made in terms of the environment protection, and FIEs keep discharging untreated waste water to the environment? Why did many incapable investors still get licenses for the projects worth billions of dollars?
Mai said that a series of problems relating to the FDI have been left unsettled for the last many years, pointing out that state management agencies have not found the solutions to the problems due to the bad policy response ability.
Prior to that, at some press conferences, when asked about how to deal with the FIEs that attempt to conduct the transfer pricing, Head of the Foreign Investment Agency Do Nhat Hoang--said that it is very difficult to find the proofs for accusation of the enterprises. He admitted that while FIEs have been playing tricks to conduct the transfer pricing, Vietnamese officers remain unqualified enough to discover the tricks.
More importantly, Hoang said, if Vietnamese agencies do not take cautious steps in fighting against the transfer pricing, this would badly affect the Vietnamese investment environment.
Meanwhile, Vu Dinh Anh, an expert from the Market and Price Research Institute, an arm of the Ministry of Finance--has urged government agencies to gather strength to fight against the transfer pricing, affirming that this should be seen as a key task to improve the quality of the FDI capital flow.
Vietnam has not used its right to choose investors
Both independent experts and government officials believe that it is now the right time for Vietnam to become choosier in licensing foreign invested projects, and to attract foreign investment at any costs.
Deputy Minister of Natural Resources and the Environment Bui Cach Tuyen has pointed out--that one of the factors that makes Vietnam attractive in the eyes of foreign investors, is the low required environment standards. This spells that foreign investors would have to pay less for the environment protection works, thus allowing them to save the investment costs.
As a result, Vietnam has become the destination of many foreign investors who try to “export the pollution” from developed countries to developing economies through FDI.
Not only having backward technologies and equipments to Vietnam, FIEs have been found as poisoning the environment by discharging untreated waste water to the environment. Vedan, Tung Kuang, Pangrim Neotex in Phu Tho province and Chinfon in Hai Phong are the most well known names.
Nguyen Tran Bat, President of Investconsult Group, has warned that Vietnam may become a waste dump of the world and face big environmental, technological and labor problems.
When agreeing to the opinion that Vietnam should not accept all the FDI projects registered by investors, Mai said that there is a right that Vietnam has not used– the right to choose suitable projects.
While foreign investors have the right to choose the countries for them to set up business, to relocate their production bases from ones to other countries, Vietnam also has the right to choose the projects it wants
Source: SGTT
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