May 8, 2012

Vietnam - When state agencies “forget” projects in calculating FDI


VietNamNet Bridge – The head offices of the Ministry of Planning and Investment (MPI) and the Hanoi Planning and Investment Authority are just one kilometer far from each other.

In principle, Director of the Hanoi Planning and Investment Authority is the subordinate of the Minister of Planning and Investment. However, the figures released by the two agencies in the age of information technology are as different as chalk and cheese.

MPI “drops” projects

A report by the Foreign Investment Agency under MPI showed that by April 20, 2012, Hanoi had attracted 11 foreign direct investment (FDI) projects capitalized at 4.6 million dollars in total. By that time, foreign investors had registered the additional investment capital of 92.8 million dollars for seven projects.

As such, Hanoi had attracted 92.8 million dollars’ worth of FDI more by April 20, 2012, ranking the 10th among provinces and cities in the FDI registered capital, according to MPI.

Meanwhile, the report by the Hanoi Planning and Investment Agency showed that in the first quarter of 2012, Hanoi got 64 projects (both newly registered and expanded projects) with the total registered capital of 147.6 million dollars. The sum includes 35.38 million dollars worth of 42 newly registered projects and 112.3 million dollars’ worth of 22 expanded projects.

As such, the figures about Hanoi’s FDI in the first four months of the year released by MPI were even lower than the figures in the first three months released by the local investment department. This might have been explained by the fact that the ministry has not counted on some projects.

In fact, the difference in the figures released by different agencies does not surprise people any more.

Earlier this year, a report about FDI by the Vietnam Association of Foreign Invested Enterprises VAFIE, also showed unreasonable points.

The report said an UNCTAD’s report on the global FDI in July 2010 showed that the implemented capital in Vietnam had reached 44 billion dollars by the end of 2009. Meanwhile, Vietnam’s Statistical Yearbook showed the figure of 67 billion dollars. If deducting 20 percent of the sum (which is believed domestically sourced capital), the actual FDI capital would be 54 billion dollars. This means the big gap of 10 billion dollars between UNCTAD’s and Vietnam’s figures.

The differences in statistical figures have raised worries about the reasonability of the government policies. The problem is that the figures have been updated in the official report of the General Statistics Office which will then serve the building up economic and investment policies.

Legal documents plentiful, but power still lacking

MPI and its dependent unit – the Foreign Investment Agency – usually have to send dispatches, urging local authorities and relevant branches to update FDI information in their localities.

MPI, for example, sent a dispatch on December 2, 2011, requesting the Vietnam National Oil and Gas Group (PetroVietnam) to report the FDI in the oil and gas sector in the fourth quarter of 2011 and the plan for the whole year 2012.

Meanwhile, the current laws stipulate that investors, state management agencies have the duty of fulfilling the obligations for statistical work.

Analysts have noted that in the dispatches, MPI only used the word “request” and asked for the cooperation of local authorities and relevant branches, which means that reporting is not a must. Meanwhile, in principle, local authorities and agencies have the obligations of fulfill their tasks as the state management agencies.

The analysts have also noted that Vietnam does not lack legal documents, but MPI seems to lack necessary power.

Kim Chi



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