Vietnam’s business environment has become less attractive in comparison to other regional countries such as Indonesia and Thailand, said Minister of Planning and Investment, Bui Quang Vinh.
The Minister of Planning and Investment, Bui Quang Vinh
Vinh said at a press conference after the 2012 Consultative Group Meeting that the expected foreign direct investment (FDI) may reach around USD13 billion this year, with around USD10.5 in actual allocations.
These figures are below the expectations set by the ministry’s Foreign Investment Agency (FIA) which hoped to see USD15-16 billion in FDI with disbursement of around USD11 billion this year, he noted.
According to the FIA, as of November 20 the country granted investment licenses to 980 new foreign-invested projects with a total registered capital of USD7.25 billion. This figure is down 39.6% from last year.
The country attracted total of USD12.18 billion in FDI in the first eleven months of this year, down 21.4% from the same period last year. Actual disbursement reached USD10 billion during the period, about the same as a year a earlier.
Vinh estimated that next year FDI may reach from USD14-15 billion, while real capital disbursement has been estimated to be from USD10-11 billion.
He said that international donors have pledged to provide nearly USD6.5 billion in official development assistance (ODA) to Vietnam in 2013, a figure which is down nearly USD1 billion from last year.
He blamed slow progress of ODA disbursement for the shortage of reciprocal capital on the Vietnamese side.
Slow site clearance, resulting from obstacles in land compensation, also added difficulties in allocation, in addition to the lack of professionalism and competence by ODA management agencies.
“The Government has advanced an additional VND5 trillion (USD239.7 million) for ODA-backed projects for 2012, but such projects may face tightened budgets beginning next year,” he said.
The Government has also been looking to other sources through public-private partnership.