Fall in January FDI approvals no cause for concern Fresh foreign direct investment (FDI) approvals tumbled in January after a sharp rise in all of 2013, but there is no concern about this as the country’s macroeconomic situation has stabilized.   A view of Saigon Hi-Tech Park in HCMC. There is no big worry about the slide in January foreign direct investment (FDI) approvals as the country’s macroeconomic situation has stabilized, thus encouraging investors to come for business - Photo: Le Hoang Last month FDI approvals, including for both new and existing projects, reached over US$397 million, down 21.9% year-on-year, according to the General Statistics Office. This is in stark contrast to last year when new FDI approvals amounted to US$21.6 billion, up 54.5% year on year and well above the target of US$13-14 billion. FDI attraction is forecast to be fine this year and the following year as the macro economy has been stabilized. According to the National Financial Supervisory Commission, foreign investment activity will improve as the World Bank has projected the world economy to grow 3% this year and 3.3% next year, compared to last year’s 2.2%. In addition, FDI activity is seen picking up this year as investors expect to benefit from the Trans-Pacific Partnership (TPP), which is set to be signed soon. In recent times, many multinationals have expressed interest in investing in Vietnam. For instance, Vung Ro Petroleum Company and Rose Rock Group have struck a deal to develop a US$2.5-billion resort community in Vung Ro Bay in the central coast province of Phu Yen Province. Hansol Electronics Vietnam, an affiliate of Samsung, has obtained approval to invest US$150 million in an electronic components production project to serve Samsung’s phone manufacturing factory in Thai Nguyen Province. Some industry insiders said the FDI inflow would keep on coming into the country thanks to its ideal geographic location, cheap labor, a large market with 90 million people and prospects from the TPP and the ASEAN Economic Community. However, some experts said that the strong FDI inflow in 2013 was unsustainable, so the nation may find it hard to reach such a high figure this year unless foreign investors pump capital into big-ticket projects. Phan Huu Thang, former head of the Foreign Investment Agency under the Ministry of Planning and Investment, said the substantial rise in FDI approvals last year was far beyond the investment authorities’ expectations. Whether the country can attract more quality foreign investment depends on the competitiveness of the economy and the investment environment. Increasing the competitiveness depends on the implementation of solutions to increase FDI capital attraction, and use and manage the capital efficiently in the coming time, he said. In addition, FDI attraction also depends on the results of negotiations of the Vietnam-EU Free Trade Agreement and the TPP and Vietnam’s ability to implement its commitments to those pacts, he said. SGT