Besides from the approaches suggested by International Finance Corporation (IFC), a member of the World Bank Group at the workshop “Recommendations on Vietnam Next Generation FDI Strategy and Vision 2020-2030” that was recently held, experts also proposed other recommendations to increase FDI.
According to the assessment of Dr. Phan Huu Thang, former Director General of Foreign Investment Agency (FIA), the recommendations of IFC are fairly reasonable, still other issues are needed to be considered.
With regard to the establishment of the new investment promotion agency, Thang said that the current decentralization and management of investment have limited the role of FIA.
Thang said that the FIA has two divisions, namely the promotion unit and the management unit.
However, the investment promotion has now been handed over to the provinces, which means that the provinces have the right to choose and give license to investment projects, implement investment promotion in other countries, which make it difficult for FIA to manage.
Regarding this aspects, Dau Anh Tuan, Director General, Legal Department at Vietnam Chamber of Commerce and Industry (VCCI) said that localities play a major role in attracting FDI.
Nevertheless, at present localities have not been able to contribute much in this area. It seems that FDI is still linked to the political performance of the provincial leaders.
Many local investment promotion agencies still lack a lot of information on investment appraisals and the current assessments of provinces are mainly based on personal experience rather than following a standard.
In addition, the present investment promotion model of the provinces is very inadequate where some of the people under the Provincial People's Committee have places under the local investment promotion agencies, so there is not a suitable standard.
Nowadays there seems to be competition between the provinces since they do not share information on investments projects with each other. For instance, a project got denied by one province because of its pollution risk but got approved right away by the neighbour province.
Tuan suggested that it is necessary to separate the state management functions with the investment promotion function.
While the state management may only require the focus of few people, investment promotion needs to have the best specialists who are knowledgeable about the investor's involvement in order to follow every step of the investor.
Furthermore, it is necessary to formulate a national program on FDI promotion and attraction to be distributed among the provinces to avoid overlapping in investment promotion between provinces as well as avoid the underground competition in attracting FDI projects among localities in the country, based on Thang's opinion.