Foreign investment pledges fall further
HANOI - The dramatic plunge of overseas investment is
continuing despite strong signs of a regional turnaround.
The Ministry of Planning and Investment said the value
of foreign investment applications from the beginning of
this year to March 31 was just 26 per cent of that in the
first quarter of last year.
Ministry figures show Vietnam licensed foreign
investment proposals of just US$121 million - including
US$32.6 million in capital expansion for existing foreign
projects - in the first three months of this year, mostly in
the oil sector.
The number of proposed foreign-invested projects last
year fell dramatically against 1998's figures which were
also significantly lower than in 1997.
The continuing downward trend has raised concern
Vietnam is falling further behind its neighbours, despite
attempts to streamline bureaucratic procedures.
Le Dang Doanh, head of the Central Institute of
Economic Management, warned that Vietnam must
urgently embrace further reforms.
"Vietnam must show greater determination and display a
higher degree of competence if it is to renovate its
economy and administrative mechanism," he said,
adding there remained an urgent need to fund education
and research, and tackle smuggling and corruption.
But an analysis of historical foreign investment figures
reveals some positive trends, particularly a significant
increase in the percentage of projects coming on-line.
Foreign direct investment and capital expansion
proposals peaked in 1996 at just over US$7.9 billion,
but only about 33 per cent of the promised money was
forthcoming.
In 1998, the pledged figure was US$4.8 billion, with
nearly 41 per cent arriving.
Estimates last year see an implementation figure of
US$1.5 billion from a promised US$2.1 billion.
By Huw Watkin - South China Morning Post - April 5, 2000.
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