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ôWe plan to raise $150 billion for economic development (to meet the GDP growth target), in which foreign capital accounts for 35% ,ö says Phan Huu Thang, director general of the Foreign Investment Agency of VietnamÆs Ministry of Planning.
Given those goals for economic expansion and fund raising, attracting foreign direct investment (FDI) is a top priority for the government, says Thang, who made the comments at the Funds World Vietnam 2007 conference being held in Ho Chi Minh City this week.
Several industries are among the priorities for attracting FDI. These include new materials and energy production, technology, agriculture, infrastructure, and human development, to name a few.
Last month, Vietnam released a list of more than 160 projects that need FDI from now until 2010.
ôWe would like to send a positive signal to the foreign investor community about the determination of the government in speeding up intensive economic reform and international economic integration process,ö Thang says.
VietnamÆs FDI commitments totaled $11.2 billion in the first 10 months of 2007, and the figure is expected to reach $15 billion by year-end, Thang notes. So far this year, foreign firms in Vietnam have disbursed $3.71 billion in investments.
From 2001 to 2005, VietnamÆs GDP has grown at an average of 7.5% annually. Last year, GDP grew by 8.2% and this yearÆs growth is expected to top that at 8.5%, which will be the countryÆs highest growth rate within the last 10 years.
Thang is confident Vietnam will be able to attract a steady flow of FDI in the coming years, noting the often cited reasons that include the countryÆs strong economic growth prospects itself and its entry into the World Trade Organization this year and the reforms that go with that.
Other reasons include VietnamÆs efforts to hasten the so-called equitisation process of state-owned enterprises. In 2006, more than 950 state-owned were transformed, and 600 of those were equitised. Thang expects another 600 state-owned enterprises to be equitised by year-end. In Vietnam, equitisation refers to the first of two stages involved in getting a Vietnamese company onto the stock markets. The most common equitisation process in Vietnam involves a company launching an IPO to turn itself into a shareholding concern first and then placing private offerings.
Investing directing in companies in Vietnam is one of the best ways to position ahead of that countryÆs economic growth, according to some fund managers in attendance at the Funds World Vietnam 2007 conference. They note that foreign ownership limits tend to contain the amount of exposure foreign investors can have in VietnamÆs stock market, which has been among the best performers in Asia in recent years.
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