Deputy Minister of Planning & Investment: Foreign Investment Continues Despite Covid

How do you assess the impacts of the Covid-19 pandemic on the Foreign Direct Investment (FDI) capital into Vietnam and on FDI businesses in the country?

By September 2021, Vietnam has 34,141 valid investment projects with registered capital of US$ 403.19 billion. This sector has been developing quickly and effectively, becoming an important part of the economy and contributing to Vietnam’s economic growth, increasing export turnovers, generating jobs and improving incomes for workers.

However, the Covid-19 pandemic has been negatively impacting businesses in the country, including FDI companies, and bringing challenges to foreign investors looking for investment and business opportunities in Vietnam.

The fourth Covid outbreak has left direct impacts on major industrial centers of the country such as HCMC, Dong Nai, Binh Duong, Bac Giang and Bac Ninh, where a large number of FDI businesses are located. It has also disrupted the production supply chain.

Deputy Minister of Planning and Investment Nguyen Thi Bich Ngoc. Photo: Economy & Forecast Review Online

The government and authorities at different levels have been supporting businesses to overcome the challenges they have been facing while striving to ensure effective Covid prevention.

On the other hand, the business community, especially FDI companies, has shown their willingness to cooperate with the authorities and assist the community in the fight against Covid in many ways. They have persevered and adapted well to the new normal to maintain production and contribute to Vietnam’s socio-economic development.

This showcases the trust that foreign investors and FDI businesses place in the business environment in Vietnam and the effectiveness of the government’s policies to support businesses.

The FDI business community has praised the government’s efforts in responding to the pandemic and expressed their positive view about Vietnam’s economic recovery. They have also pledged to continue long-term investment and business in Vietnam, especially as the Prime Minister has instructed the relevant authorities to develop safe adaptive procedures and identify a new Covid prevention strategy.

Despite the positive outlook on the potential to attract FDI, the Covid-19 pandemic continues to have significant impacts on business and production activities. What are the reasons for this?

The Covid-19 pandemic has left negative impacts on the socio-economy of many countries, including Vietnam. FDI capital has plummeted globally and has not shown signs of recovery. This has intensified the competition to attract FDI between countries and affected foreign investment capital flowing into Vietnam.

Meanwhile, Covid continues to influence businesses in Vietnam. Some notable reasons are lack of human resources, restricted immigration and long quarantine policies. The tight rules imposed on factory work that led to disrupted production and supply chain also cause new, potential investors to be hesitant to invest in Vietnam.

In addition, Vietnam’s selectiveness in attracting investment has eliminated small-scale projects with little added value.

For FDI businesses to continue long-term investment in Vietnam, what have the government and especially the Ministry of Planning and Investment done to address the challenges facing foreign investors?

To address the challenges brought about by the continuous lockdown and social distancing, the government has proposed policies that serve the double goal of preventing Covid while ensuring the production activities of businesses.

The government has also issued decrees and resolutions on reducing land renting costs, supporting businesses and cooperatives, assisting employees and employers and reducing utility costs, as shown by Resolution No 105/NQ-CP dated 9/9/2021 on helping businesses and cooperatives facing the pandemic.

Vietnam continues to attract FDI despite the Covid-19 pandemic. Photo: Nhip cau Dau tu Magazine

Carrying out the government’s instructions, the Ministry of Health is working to complete the guidance on “safe, flexible adaptation to and effective control of the Covid-19 pandemic” to gradually recover socio-economic activities.

Foreign investors and FDI businesses have expressed their recognition of the government’s policies to support businesses and believed that these policies had contributed to alleviating the difficulties shouldered by businesses, helping them to maintain businesses activities and jobs for workers.

With the Party’s prompt and sound guidelines and the government and authorities’ determination, I believe FDI activities in Vietnam will continue to have stronger transformations.

How do you assess Vietnam’s potential for attracting FDI, given the government’s efforts?

The Covid-19 pandemic is also an opportunity for Vietnam to continue to complete regulations, improve governance capacity, improve the business environment and boost digital government. In addition, it is a chance for our country to develop new business models such as digital economy, business transformation based on digital platforms, enhance integral industries such as pharmaceuticals and strengthen the capacity of the health sector at the local level. More importantly, it presents chances for investors to research investment opportunities.

Most recently, the government issued Resolution 115/NQ-CP dated 6/8/2020 to promote supporting industries in Vietnam. The industries are considered an important solution to help Vietnam improve the quality of the economy, work towards sustainable development and avoid the middle-income trap. They also help to enhance FDI attraction, boost technological reception and handover and strengthen the development of small and medium businesses in the country so that local businesses can involve deeply in the supply chain of FDI companies and the global chain of multinational corporations.

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