Vietnam FDI higher than expected: official

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The manufacturing sector has attracted the largest FDI in the first nine months / PHOTO COURTESY OF SGTO

Foreign direct investment (FDI) may have seen an unexpected surge this year but things are likely to become difficult in future, a government official said Wednesday.

Vu Van Chung, deputy head of the Foreign Investment Agency, told online newspaper VnExpress that with US$2.3 billion in September inflows in the first nine months went up to $15 billion.

The government had set a target of $14 billion for the whole year, which would have represented a 36 percent increase year-on-year, Chung said.

Around $8.62 billion has been brought in so far, a 6.4 percent rise.

Pointing to the fact many were small-scale projects, Chung said this indicates a possibility that the number of medium-scale projects would decrease gradually in the next one or two years.

This would affect Vietnam's FDI plans in the next few years as well as manufacturing and export activities, he said, quoting official figures that show that FDI businesses account for 65 percent of the country's exports.

He blamed the reluctance of investors on the poor infrastructure and human resources, tortuous regulations, and the troubled economy.

Foreign investment in technology is increasing, though it remains much lower than in processing and manufacturing, Thoi bao Kinh te Saigon (Saigon Times) Online quoted the ministry as saying.

At$ 380 million, it represents a third of the cumulative investment in the last 25 years and the third highest in any sector this year.

Manufacturing tops with nearly $7.6 billion, followed by property with more than $587 million.

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