Ho Chi Minh City has been a favorite destination for foreign investors ever since the Foreign Investment Law came into effect in 1987, and FDI has made a huge contribution to the city’s development. However, a large portion of the investment that has been committed remains on paper.
|Workers make ceramic vases for export at Australian-owned Natural Choice Company in Cu Chi District, HCMC (Photo: SGGP)|
Over 3,100 projects with a total investment of US$26 billion are still in operation in the city, accounting for 87 percent of all FDI businesses registered in the last 20 years.
The city attracted the largest FDI flows since 2006, a year before the country joined the World Trade Organization, with 1,281 projects worth $12 billion being committed by 2008.
The services sector has seen the most investment. Around 36.3 percent of foreign funds have come into Industry and construction and 0.28 percent into agriculture, forestry and aquaculture.
FDI projects have helped develop social and technical infrastructure and improve people’s lives, vice chairman of the city People’s Committee, Nguyen Trung Tin, said. Many state-of-the-art projects in fields like science, education and health have been carried out by foreign investors.
FDI projects have also helped urbanize the city, giving it one of the highest urbanization rates in the country, Mr.Tin added.
But of the FDI pledged in the last 20 years only around 40 percent has actually come into the country, or $10.1 billion out of $26 billion.
Official agencies blame this on poor transport infrastructure and the slow acquisition of land.
The Investment and Planning Ministry’s Foreign Investment Agency (FIA) blames the delay so far this year on the global crisis.
Phan Huu Thang, the FIA head, said local authorities have to help foreign investors overcome difficulties and carry out their projects.
The city authorities should review and focus on around 50 of the most important projects to ensure the investors bring in the money, he added.
Hua Ngoc Thuan, head of the city’s Southern Area Development, said authorities should license large projects in lots rather than whole so that each of them can be finished quickly.