The existing FDI management model is greatly problematic and needs
changing. But how to change it now and apply a new FDI management model remains
in question.- Dao Quang Thu MPI Deputy Minister
Vietnam may set up a
national-level body to manage foreign direct investment until 2020.
At last week’s workshop
discussing the Ministry of Planning and Investment’s (MPI) new draft foreign
direct investment (FDI) attraction strategy until 2020, the MPI’s Foreign
Investment Agency director Do Nhat Hoang said Vietnam would manage FDI by a
concentrated national-level coordination body, instead of the existing
decentralisation model.
The draft strategy would be
officially discussed by the government in early October 2012 and then a
resolution on the nation’s FDI attraction until 2020 would be issued.
The draft strategy comprises some
different solutions, also known as models, about state management of FDI. Among
the models was one that received wide praise from workshop participants. This
model called for the establishment of an FDI steering committee led by a deputy
prime minister, with the MPI minister as vice chair and representatives from
leaders of some ministries and sectors.
According to the draft strategy,
this model will “help prevent [localities’] breaking the government’s FDI
attraction regulations, and ensure wishlist projects must be suitable to the
national socio-economic development strategy and planning of industries.”
“We agree with this model. The
committee means a connection between the government, the MPI and localities in
managing FDI. It will help the government and the MPI know what localities are
doing with FDI projects,” said Nguyen Quoc Hung, vice head of the Government
Office’s International Relation Department.
“This model will also help
improve localities’ FDI attraction quality, meaning that localities must be
responsible to the government for FDI projects they lure,” said Ngo Sy Bich,
head of Bac Ninh Provincial Industrial Parks Management Authority.
“I think the committee should
have periodical meetings to review local FDI attraction plans and results,”
Hung said.
However, MPI Deputy Minister Dao
Quang Thu said though this model had virtues, the government and MPI must
“carefully study it” before coming to a final decision.
“The existing FDI management
model is greatly problematic and needs changing. But how to change it now and
apply a new FDI management model remains in question,” he said.
From 1987 when Vietnam’s first
Foreign Investment Law was enacted to mid-2004, FDI into the country was
managed wholly by the government. However, the government in 2004 issued
Resolution 08/2004/NQ-CP dated June 30, 2004 on boosting decentralised
administration between the government and local authorities in provinces and
cities under the central rule, under which localities are enabled to lure and
manage FDI.
“However, this mechanism has
prompted localities to massively coax FDI at any cost, without any focus on
environmental protection and attracting high technology, while the government’s
prime targets of coaxing high technology and generating employment via FDI have
totally collapsed,” Hung said.
“For instance, golf courses are
booming in many localities and many localities licenced foreign forest
plantation projects but the government did not know about that,” he said.
From 1987 to July 31, 2012,
Vietnam licenced more than 14,000 FDI projects worth $206.3 billion, of which
$96.6 billion was disbursed. FDI projects were largely focused on construction
and industry sectors (54.8 per cent of registered capital), services (40 per
cent) and agro-forestry-fisheries (1.6 per cent).
Thanh Tung | vir.com.vn
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