Proactive in attracting foreign investment

Dr Phan Huu Thang - Dec 20, 2019 | 11:56 AM GMT+7

TheLEADERResolution No. 50-NQ/TW issued by the Politburo on August 20, 2019 will promote activities of attracting and using foreign investment in Vietnam in the coming period in the right way, while encouraging and ensuring the interests of foreign investors.

In December 1987, the National Assembly passed the Law on Foreign Investment in Vietnam. This is the first product of the renovation process and also the first law for the attraction and use of foreign investment capital based on the basic principles of the market economy and the principle of respect for independence and sovereignty.

Right at that time, the law adjusted not only issues related to the form, field, investment area and policies applicable to foreign investment, but also the establishment, organizing and managing activities of foreign-invested enterprises.

The 1987 Foreign Investment Law was continuously amended and supplemented at different levels in the years of 1990, 1992, 1996 and 2000 before becoming the 2005 Investment Law.

The former law on foreign investment and the current Law on Investment have always been the institutionalization of the Party's innovative lines and views on foreign economic relations and investment cooperation with foreign countries.

Accordingly, the guiding principle is consistent through the development and completion of the Investment Law to create a clearer, more favorable legal framework for investment and business, strengthening the alignment between foreign-invested economy and domestic economy, building a unified legal framework in accordance with international practices and international commitments of Vietnam.

Looking back over 30 years of attracting and using foreign investment since December 1987, it can be affirmed that Vietnam has been very successful in attracting and using foreign investment.

However, the attraction and management of foreign investment activities in Vietnam still have limitations, weaknesses and new complex problems related to quality, efficiency, and defense - security due to the duality of foreign investment flows and the effectiveness and efficiency of state management of foreign investment is limited.

The shortcomings have been pointed out over the years but have not been addressed by many reasons, of which subjective reasons have been identified as the main causes leading to institutions and policies on foreign investment that have not kept up with development requirements.

If it is not completed soon, it will deflect the orientation of attracting foreign investment and Vietnam will be unable to get high-quality and efficient FDI capital as we expect when implementing the country's sustainable development strategy during the 2011 - 2020 period and the following years.

Proactive in attracting foreign investment
Dr Phan Huu Thang, former general director of Foreign Investment Agency, the Ministry of Planning and Investment

Facing unpredictable developments of the world political economy, along with the very high demand for foreign investment capital for socio-economic development to 2030, Vietnam is well aware of the need to improve the quality and efficiency of foreign investment, preventing bad projects and investors who are not in good faith and removing restrictions and weaknesses of foreign investors.

Vietnam will use policy levers to guide foreign investment into areas that it wants, creating added value, higher productivity, strengthening links with domestic enterprises, ensuring foreign investment will contribute to inclusive development and sustainable economy. Meanwhile, Vietnam still maintains the independence and autonomy of the economy.

Resolution 50-NQ/TW of the Politburo has been issued in time of need and importance for the innovation process of growth model, restructuring of the economy and improvement our socialist-oriented market economy in the new period. It is also necessary for the international community to see the consistency of our Party and State's policies to attract foreign investment and Vietnam’s being a reliable destination for foreign investors.

The resolution imposes very high demands on the state management apparatus on foreign investment as well as all relevant ministries, branches and localities in finalizing institutions and policies to improve the quality and efficiency of foreign investment in the coming period.

The resolution has set the overall goal of creating business environment and competitiveness of ASEAN Top 4 before 2021; Top 3 before 2030. Specific targets are registered capital in the period of 2021 – 2025 amounting to $150 - 200 billion ($30 - 40 billion per year year); 2026 - 2030 period: $200 - 300 billion ($40 - 50 billion per year). Disbursed capital for the period of 2021 – 2025 is expected to be $100 - 150 billion and $150 - 200 billion for 2026 - 2030 period.

In order to achieve high goals, many of which have very short implementation time, need to be completed before 2021. Resolution 50-NQ / TW has set out five guiding points and seven key solutions weaknesses include three guiding views that are particularly important compared to the previous questioning approach: Proactively attract and selectively cooperate in foreign investment, taking quality, efficiency, technology and environmental protection is the main evaluation criteria; Multilateralization, diversification of partners, forms of investment, ... ensuring national defense and security, ... improving the autonomy and autonomy of the economy, strengthening the Party's leadership, effective management of Government…

In the seven main tasks and solutions mentioned in Resolution 50-NQ/TW, as well as from the existing limitations of foreign investment, it is necessary to focus on four key tasks and solutions. weaknesses: Completing institutions and policies to attract investment; Completing institutions, policies on investment management and supervision; Improve the effectiveness and efficiency of state management of foreign investment; Strengthening the Party leadership.

Based on the guiding views and tasks, the main solution in Resolution 50-NQ/TW needs further research to identify specific projects corresponding to each task and solution to obtain organization of the implementation of this Resolution is consistent with the direction and the deadline set forth.

In order for the Resolution 50-NQ/TW to quickly come to life, it requires the state management agencies in charge of foreign investment, concerned ministries and branches and localities to take the initiative in a sense of high responsibility.

In addition, attention should be paid to propagating and disseminating in a understandable and practical manner the content and meaning of the Resolution to the domestic and foreign business community, to employees in enterprises with foreign invested enterprises in particular and society in general in order to raise the correct, complete and consistent awareness of the position and role of foreign investment in the Vietnamese economy.

This will enhance the social supervision of foreign investment activities in Vietnam, contributing to improving the quality and efficiency of foreign investment.