With initial success in containing COVID-19 and an advantage as a safe investment destination, Vietnam is attracting a shift of foreign direct investment (FDI) inflows
Vietnam is a safe investment destination and ready to receive a shift FDI inflows. (Photo: tapchitaichinh.vn)
Now the COVID-19 pandemic hastened the trend. The US, many European countries, Japan, and the Republic of Korea have announced that they will support companies to move production out of China to reduce dependence on the economy.
The US’s tech giant Apple has increased manufacturing of millions of AirPods, wireless earphones, in Vietnam. Many other spare parts will also be produced in Vietnam. Recently Apple Vietnam posted job advertisements for key positions, a move said to bring better oversight for production of components in Vietnam.
A variety of corporations including Microsoft, Samsung, and LG are making further moves into Vietnam.
At a recent video-conference between the Prime Minister and businesses, Nguyen Chi Dung, Minister of Planning and Investment, said “Vietnam’s prestige and position are spoken highly by the international community following Vietnam’s success in prevention and control of the COVID-19 pandemic.”
“This is a golden opportunity for the world to know Vietnam as a strategically reliable country, a safe investment destination, and how it is ready to welcome capital flows. The advantages can help Vietnam recover its economy more early toward establishing a new position on the international arena,” Dung added.
Chairman of the EuroCham Vietnam Nicolas Audier pointed out Vietnam is leading the world in the COVID-19 fight thanks to timely public health measures and effective economic stimulus packages.
“These drastic measures will enable Vietnam to maintain its economic growth and rising foreign direct investment while protecting the health and well being of its citizens. These actions as I've shown help to maintain the confidence of European enterprises which continue to see Vietnam as a safe, attractive, competitive place in which to do business.
Audier noted, “Indeed Vietnam is now well positioned to group new opportunities to resume stable economic development thank to these proactive approaches.”
According to Hong Sun, Vice Chairman of the Korea Chamber of Business in Vietnam (KORCHAM), “The Korean business community highly appreciates Vietnam's continuous efforts to improve the investment environment, especially its measures to fight the novel coronavirus. This has consolidated the Korean and other foreign investors, confidence in Vietnam, a safe and attractive investment destination.”
“Despite numerous difficulties and challenges, Vietnam has outlined plans to fight the epidemic and support businesses. The Korean business community is committed to accompanying Vietnam in economic development and investment environment improvement,” said Hong Sun.
Committed FDI in Vietnam reached US$12.3 billion in the first four months, down 15.5% year-on-year but rebounded in April by 81% month-on-month and 62% against 4 years ago.
Prime Minister Nguyen Xuan Phuc said Vietnam ranking of the 12 out of 66 emerging economies in financial strength proves that Vietnam’s long-term growth potential is sustainable.
“The Economist newspaper ranks Vietnam among safe economies after the epidemic based on public debt, foreign debt, cost of borrowing, and reserve cover. The World Bank praised Vietnam’s stable macro-economy, the low government debt, and the economic resilience including foreign exchange reserves and timely reduction of interest rates.
The achievements are attributed to economic development in recent years and strengthened major economic balances. Vietnam has signed dozens of free trade agreements which create unprecedented opportunities to access international markets. Vietnamese businesses should promptly take advantage of the opportunity.”
To attract more foreign investment, Vietnam is amending the Laws on Investment and Enterprises and implementing action programs to attract foreign investment in the current situation.
In addition, economic zones and industrial parks nationwide have devised plans and prepared land, infrastructure and human resources for investors to move their factories to Vietnam.