Resolution No. 103/NQ-CP of August 29, 2013, on orientations for higher efficiency of foreign direct investment attraction, use and management in the coming period

THE GOVERNMENT

Resolution No. 103/NQ-CP of August 29, 2013, on orientations for higher efficiency of foreign direct investment attraction, use and management in the coming period

In the past time, foreign direct investment (FDI) has positively contributed to Vietnam’s growth and development. By June 2013, there had been 15,067 effective projects with a total registered capital of about USD 218.8 billion and the implemented capital of around USD 106.3 billion. FDI has become an important additional source of the society’s total investment capital (accounting for about 23.3% of the society’s total investment capital in 2012, contributing to increasing production capacity of some sectors, renovating technology, improving economic management and business administration, increasing export turnover (accounting for around 64% of 2012’s total export turnover), restructuring exports, improving the international payment balance and contributing to the budget (about USD 3.7 billion in 2012), developing high-quality human resources and generating jobs (over 2 million direct laborers and 3-4 million indirect laborers), etc. At the same time, FDI has also exerted spill-over impacts on other sectors of the economy, spurring domestic investment resources, restructuring the economy, reforming state enterprises, renewing the administrative procedures, completing the market economy institutions and boosting international economic integration. Through foreign investment cooperation, Vietnam has enhanced its political and foreign relations and developed friendly ties with many countries, territories and partners around the world.

Nevertheless, the FDI attraction has so far failed to achieve the expected targets of attracting high technologies, source technologies, supporting technologies, infrastructure development investment and technology transfer. The quality of FDI projects is generally not high and their added value is low. They are mainly of medium and small scale. The investment based on production lines by transnational groups remains limited. A number of FDI enterprises have used obsolete and polluting technologies. Some have manifestations of employing the mode of transfer pricing for tax evasion, thus causing losses of budget revenues; or fail to ensure the legitimate interests of laborers, etc.

The above-mentioned limitations are attributed mainly to the legal and policy systems which still have many asynchronous, overlapping and inconsistent provisions, and to the fact that Vietnam has not yet been proactive in and properly prepared necessary conditions for assuring the effective operation of FDI, such as infrastructure, human resources, domestic enterprises, planning, rational technical barriers, etc. The appraisal and grant of investment certificates in some cases are not strict, failing to fully comply with planning and the capacity of the technical and social infrastructure systems. The inspection, examination and supervision of FDI projects remain irregular and ineffective. Methods of investment promotion are slow to be renewed, investment promotion activities from central to local levels have not yet been closely coordinated and prove to be inefficient. On-spot investment promotion through supporting licensed projects to be implemented in a convenient manner has not been given due attention. Vietnam’s investment environment has revealed a number of limitations, becoming less competitive than many regional countries.

In face of the above-mentioned situation and in order to  suit the new context and raise the competitiveness of Vietnam’s investment environment, the Government requests ministries, sectors, central agencies and provincial-level People’s Committees to thoroughly grasp the viewpoints and orientations and concentrate on directing and organizing the implementation of the major solutions below:

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