Foreign
direct investment in HCM City collapses
Foreign direct investment (FDI) in Ho Chi Minh City during the first
seven months of 2016 has collapsed, decreasing by more than 65% when compared
to last year’s same corresponding period, reports the Municipal Statistics
Office.
However,
it is hard to get a clear and accurate accounting from the Statistics Office
due to a lack of transparency.
First,
the Statistic’s Office measures FDI using the date a project is registered
with the office as the measurement date and the amount of the investment
after the project is completed as the value of FDI.
This
is obviously an erroneous approach to measuring FDI as the true determinant
is the actual expenditure or disbursement of funds on projects by foreign
investors during a given period.
However,
even using the Statistics Office inaccurate figures, the amount of FDI
registered for the first seven months of 2016 was US$863.6 million, a
fraction of the US$2.5 billion registered for the same seven-month period in
2015.
According
to the Statistic’s Office, real estate remained the most attractive segment
of the economy to foreign investors, tallying in at US$280 million or 43.7%
of total FDI. Manufacturing stood second at US$185 million or 28.9% of the
total.
For
the period, the Cayman Islands was the leading source of FDI at US$231
million followed by Japan at US$96.1 million; Singapore (US$87.2 million);
the Republic of Korea (US$51.2 million); British Virgin Islands (US$45
million) and Taiwan (US$30.3 million).
Le
Thi Huynh Mai, deputy director of the Municipal Department of Planning and
Investment, told Saigon Giai Phong (Liberated Saigon) newspaper that the FDI
results did not accurately reflect a true overall picture of investment.
Her
explanation was that large-scale projects are most often proposed by foreign
investors in the latter half of this year, so not too much attention should
be paid to the bottom dropping out of investment in the first part of the
year.
So
it is clear that even Mrs Mai is confused on how to properly measure FDI.
As
an incentive to attract investors, the City continues to allocate more
cleared land for production and upgrade infrastructure at industrial parks
and export processing zones, said Mrs Mai.
The
City is expanding the second phase of the Saigon Hi-Tech Park by 600 hectares
and plans to expand the Quang Trung Software Park. It is also focusing on
speeding up administrative reforms.
Earlier,
Mai said the City considered FDI important in its development.
The
City would aim to attract FDI in knowledge and technology industries,
supporting industries and bio-technology to realize the goal to become a
knowledge economy, achieve green growth, and improve development quality and
competitiveness.
Meanwhile,
Nguyen Thanh Phong, chair of the People’s Committee, candidly pointed out
that unofficial payment to public officials are big part of the reason
foreign investors have an unfavourable opinion of the City’s business
environment and the leading cause of the decline in FDI.
He
pledged to cut corruption and remove administrative red tape and other
cumbersome obstacles to create a more favourable business climate conducive
to the needs of foreign investors.
VOV
|
Thứ Sáu, 28 tháng 10, 2016
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