Vietnam to re-organize FDI management

VietNamNet Bridge – The Ministry of Planning and Investment (MPI) has suggested proposing a state’s steering committee on foreign direct investment (FDI) management, which will have the “super power” to deal with the problems which cannot be settled by ministries and branches.

The national steering committee is a part of the plan on renovating the FDI management in the new development stage, when Vietnam would be choosier in attracting foreign investment, striving for investment quality instead of quantity.

If the idea is approved, the steering committee would be headed by a Deputy Prime Minister, while the officials from MPI would be the deputy chair of the committee and representatives from relevant ministries would serve as the members.

In 2012, Vietnam reviews the last 25-year period of implementing the Foreign Investment Law.

Thoi bao Kinh te Vietnam has quoted an MPI’s official as saying that there are two FDI management models being applied in regional countries.

With the first one, which can be seen in Thailand or Malaysia, there is only one management agency that takes care for both domestic and foreign investment, while there is no specific agency in charge of FDI.

The biggest outstanding feature of the model is the transparency and simplicity which allows the state to pursue consistent investment encouragement policies. Meanwhile, the disadvantage of the model is that it cannot cover all the possible arising in reality; therefore, it cannot make timely decisions on specific cases.

The second model is the one being applied in Vietnam, which means that there is an agency in charge of FDI promotion and management. Under the mechanism, all the FDI activities could be registered at one agency.

However, the model has some disadvantages, including the power concentration and the separation of the domestic and foreign management systems, which may lead to the investment imbalance.

MPI has admitted that the FDI management nowadays is facing big difficulties due to the disadvantages of the model.

Regarding the suggested steering committee on FDI management, analysts believe that such a committee would help heighten the FDI management efficiency.

Samsung, Nokia and Robert Bosch, the big foreign investors in Vietnam have asked for the government’s intervention when seeking investment incentives for their specific investment projects.

MPI and relevant agencies including the Ministries of Finance, Industry and Trade (MOIT), Science and Technology all have to join forces to consider the projects thoroughly before suggesting to the government the solutions which can both ensure the national benefits and the investors’ benefits.

According to Dau tu newspaper, Taiwanese E-United and Japanese JFE, have also been reportedly contacting the Dung Quat Economic Zone, Quang Ngai provincial authorities, MPI, MOIT, Ministry of Natural Resources and the Environment, and the government as well, to seek the support in the problems relating to the project’s investment capital adjustment.

The Taiwanese investor plans to increase the capital of the Guang Lian steel project in the economic zone from 3 billion dollars to 4.5 billion dollars, and “admit one more investor – JFE.

Analysts say it would take the investors years, not months, to get the final answers from the government. Meanwhile, if such a national steering committee on FDI management exists, the problems would be settled more quickly.

Advocating the suggested model,, Ngo Sy Bich, Head of the Board of Management of Industrial Zones in Bac Ninh province, said the one-stop-shop mechanism in localities and the national steering committee would help improve the FDI quality in the time to come.

Compiled by C. V