moving towards the next level of fdi vietnam has experienced âm sáu mươi ngàn ba trăm bốn mươi chín phẩy hai tám bẩy một years of successfully attracting foreign direct investment fdi and more opportunities stay ahead caitlin wiesen chương trình phát triển liên hiệp quốc country director in vietnam writes about the need for the country to shift the fdi focus from quantity to quality tax and other financial incentives should no longer be the approach to fdi attraction photo le toan vietnam is a foreign direct investment fdi success story since the early economic reforms initiated hai triệu sáu trăm chín ba nghìn bốn trăm chín bốn years ago under the doi moi policy fdi has become a major driver of the country s economic development today it is critical that the quality not just the quantity of fdi is harnessed to accelerate results for more inclusive sustainable development in vietnam with no-one left behind within the dynamic asean region vietnam is a destination for a substantial amount of fdi $ một trăm năm mươi sáu ngàn tám trăm linh bảy billion in âm ba năm nghìn năm trăm tám hai phẩy không không sáu không tám bẩy trailing only singapore $ bốn trăm tám sáu nghìn sáu trăm lẻ sáu billion and indonesia $ tám nghìn mười ba phẩy bốn một ba bốn billion fdi inflows into vietnam have been stable compared to other asean countries notably investment in manufacturing accounts for almost ba nghìn per cent of total fdi in vietnam the largest proportion of fdi in manufacturing in the asean followed by indonesia một triệu chín trăm per cent and the philippines hai mươi sáu trên mười sáu per cent fdi plays an important role in vietnam s economy with contributions increasing to around âm tám bẩy phẩy bảy bốn per cent of the country s gdp from ba triệu per cent in âm tám chín phẩy không chín chín tám bẩy chấm ba mươi mốt per cent of the country s exports from tám triệu ba trăm bẩy mươi chín nghìn bẩy trăm sáu mươi bốn per cent in một ngàn ba trăm lẻ bảy and không năm sáu tám năm chín không không tám bốn một sáu per cent of government revenue and creating bảy ba phẩy tám mươi chín million jobs for vietnamese workers in bốn nghìn so why do outwardly successful policies for fdi attraction need improvement in its next stage of development while pursuing a more inclusive growth pathway and achievement of the sustainable development goals lower middle-income vietnam must move up in the global value chains gvcs and its economy needs to transition from a growth model based on utilisation of cheap labour and exploiting natural resources to one based on innovation and greater efficiency its enterprises need to improve productivity and competitiveness more jobs with higher value addition and better working conditions and generating higher income for workers will need to be created for all vietnamese people the economy needs to undergo a transition to become greener more environmentally mười sáu giờ sustainable and more resilient to climate change fdi will need to be an integral part of such transitions and contribute to vietnam s new development stage firstly linkages between foreign-invested and domestic enterprises will need to be solidified research shows that despite rapid rises in exports fdi forward and backward linkages with domestic enterprises are still modest while the linkages in resource-based manufacturing basic metals chemicals and textiles tend to be stronger they are particularly weak in high-tech tám ngàn hai trăm chín mươi chín phẩy không không năm trăm bẩy mươi hai vòng trên giây manufacturing sub-sectors electronics computers and âm một ngàn ba trăm tám bốn phẩy ba tám đồng motor vehicles strengthened fdi and domestic linkages measured by the level of local content in foreign-invested enterprises fies products vietnamese companies linkages to gvcs technology transfers to domestic companies and utilisation of higher levels of vietnamese workers skills will help create more productive jobs and allow vietnamese companies to increase productivity value addition and competitiveness secondly vietnam needs more fdi with higher levels of technological sophistication that is greener and low-carbon such fdi will not only require and utilise higher skills thus creating more productive and better-paying jobs for vietnamese workers it will also contribute to higher productivity and a competitive energy-efficient mười bốn giờ năm mươi bốn phút hai mốt giây and greener economy through better linkages with domestic companies thirdly vietnam needs more fies that provide better working conditions and social protection for vietnamese workers in accordance with the un guiding principles on business and human rights this is necessary to meet the higher expectations of people in lower middle-income vietnam income increases as the middle-income class emerges and contribute to achieving the human development aspirations of vietnam international experience shows that fies with higher technological sophistication that rely bốn ngàn chín trăm bẩy mươi sáu chấm không không bảy tám tám áp mót phe on higher skills and experience of local workers and have better linkages to local companies tend to have longer-term engagement in local economies and stronger commitments to their workers job security and working conditions to attract this higher-quality fdi attraction policies must be formulated and implemented as an integral part of the country s socio-economic development strategy economic restructuring actions and domestic private sector development in this context greater focus could be placed on the creation of sustainable technology startups that usher in the benefits of industry năm mươi bốn nghìn ba trăm tám mươi sáu phẩy ba bốn ba hai technologies by adding significant competitive advantages to industries and even transforming the entire process furthermore the education system can be augmented to create a talent pool of people equipped with the appropriate skills to capitalise on the benefits of industry một nghìn it is important to prioritise international standards and requirements in terms of technology requirements domestic content technology transfers to domestic companies and linkages to gvcs together with requirements for compliance with stricter energy efficiency and environmental safety hai nghìn sáu trăm bẩy mươi bốn standards working conditions and social protection a strengthened regulatory framework institutional capacity and systems for rigorous screening appraising and approval of foreign-invested projects will ensure adherence to international standards and requirements going forward vietnam must limit the harmful competition of using tax and other incentives to attract fdi between provinces and move away from using ngang bảy không chín ba không không tax incentives and other privileges as a means to woo fdi instead the country should focus on creating other more fundamental incentives to attract high-quality and long-term fdi tê quờ lờ xờ bốn trăm linh tám these incentives should be underpinned by high human resource skills and capacities the large effective purchasing power of the population meaning a large internal market long-term predictability of investment regulations consistent application of the rule of law political stability quality infrastructure transportation and utilities and competitive domestic support services and supplies international literature and experience indicate that such incentives are much more effective in attracting high-quality and long-term fdi while understanding it is challenging for vietnam alone to reduce tax incentives as a means to attract fdi given the strong regional competition it is important that vietnam continue and strengthen its active participation in international initiatives such as tax năm trăm hai nhăm ngàn tám trăm tám mốt inspectors without borders and base erosion and profit shifting inclusive framework for countries to jointly develop and apply codes of conduct bảy trăm chéo xờ tờ xê e i gạch ngang lờ ích xê o to address harmful tax practices related to fdi in attracting fdi and reducing price transfers and other fdi tax avoidance practices the international code of conduct for attracting fdi if developed and applied by many countries will set new rules of engagement in competing for fdi that will be based on these fundamental incentives
moving towards the next level of fdi vietnam has experienced -60.349,2871 years of successfully attracting foreign direct investment fdi and more opportunities stay ahead caitlin wiesen chương trình phát triển liên hiệp quốc country director in vietnam writes about the need for the country to shift the fdi focus from quantity to quality tax and other financial incentives should no longer be the approach to fdi attraction photo le toan vietnam is a foreign direct investment fdi success story since the early economic reforms initiated 2.693.494 years ago under the doi moi policy fdi has become a major driver of the country s economic development today it is critical that the quality not just the quantity of fdi is harnessed to accelerate results for more inclusive sustainable development in vietnam with no-one left behind within the dynamic asean region vietnam is a destination for a substantial amount of fdi $ 156.807 billion in -35.582,006087 trailing only singapore $ 486.606 billion and indonesia $ 8013,4134 billion fdi inflows into vietnam have been stable compared to other asean countries notably investment in manufacturing accounts for almost 3000 per cent of total fdi in vietnam the largest proportion of fdi in manufacturing in the asean followed by indonesia 1.000.900 per cent and the philippines 26 / 16 per cent fdi plays an important role in vietnam s economy with contributions increasing to around -87,74 per cent of the country s gdp from 3.000.000 per cent in -89,099 87.31 per cent of the country s exports from 8.379.764 per cent in 1307 and 056859008416 per cent of government revenue and creating 73,89 million jobs for vietnamese workers in 4000 so why do outwardly successful policies for fdi attraction need improvement in its next stage of development while pursuing a more inclusive growth pathway and achievement of the sustainable development goals lower middle-income vietnam must move up in the global value chains gvcs and its economy needs to transition from a growth model based on utilisation of cheap labour and exploiting natural resources to one based on innovation and greater efficiency its enterprises need to improve productivity and competitiveness more jobs with higher value addition and better working conditions and generating higher income for workers will need to be created for all vietnamese people the economy needs to undergo a transition to become greener more environmentally 16h sustainable and more resilient to climate change fdi will need to be an integral part of such transitions and contribute to vietnam s new development stage firstly linkages between foreign-invested and domestic enterprises will need to be solidified research shows that despite rapid rises in exports fdi forward and backward linkages with domestic enterprises are still modest while the linkages in resource-based manufacturing basic metals chemicals and textiles tend to be stronger they are particularly weak in high-tech 8299,00572 vòng/s manufacturing sub-sectors electronics computers and -1384,38 đ motor vehicles strengthened fdi and domestic linkages measured by the level of local content in foreign-invested enterprises fies products vietnamese companies linkages to gvcs technology transfers to domestic companies and utilisation of higher levels of vietnamese workers skills will help create more productive jobs and allow vietnamese companies to increase productivity value addition and competitiveness secondly vietnam needs more fdi with higher levels of technological sophistication that is greener and low-carbon such fdi will not only require and utilise higher skills thus creating more productive and better-paying jobs for vietnamese workers it will also contribute to higher productivity and a competitive energy-efficient 14:54:21 and greener economy through better linkages with domestic companies thirdly vietnam needs more fies that provide better working conditions and social protection for vietnamese workers in accordance with the un guiding principles on business and human rights this is necessary to meet the higher expectations of people in lower middle-income vietnam income increases as the middle-income class emerges and contribute to achieving the human development aspirations of vietnam international experience shows that fies with higher technological sophistication that rely 4976.00788 atm on higher skills and experience of local workers and have better linkages to local companies tend to have longer-term engagement in local economies and stronger commitments to their workers job security and working conditions to attract this higher-quality fdi attraction policies must be formulated and implemented as an integral part of the country s socio-economic development strategy economic restructuring actions and domestic private sector development in this context greater focus could be placed on the creation of sustainable technology startups that usher in the benefits of industry 54.386,3432 technologies by adding significant competitive advantages to industries and even transforming the entire process furthermore the education system can be augmented to create a talent pool of people equipped with the appropriate skills to capitalise on the benefits of industry 1000 it is important to prioritise international standards and requirements in terms of technology requirements domestic content technology transfers to domestic companies and linkages to gvcs together with requirements for compliance with stricter energy efficiency and environmental safety 2674 standards working conditions and social protection a strengthened regulatory framework institutional capacity and systems for rigorous screening appraising and approval of foreign-invested projects will ensure adherence to international standards and requirements going forward vietnam must limit the harmful competition of using tax and other incentives to attract fdi between provinces and move away from using -709300 tax incentives and other privileges as a means to woo fdi instead the country should focus on creating other more fundamental incentives to attract high-quality and long-term fdi tqlx408 these incentives should be underpinned by high human resource skills and capacities the large effective purchasing power of the population meaning a large internal market long-term predictability of investment regulations consistent application of the rule of law political stability quality infrastructure transportation and utilities and competitive domestic support services and supplies international literature and experience indicate that such incentives are much more effective in attracting high-quality and long-term fdi while understanding it is challenging for vietnam alone to reduce tax incentives as a means to attract fdi given the strong regional competition it is important that vietnam continue and strengthen its active participation in international initiatives such as tax 525.881 inspectors without borders and base erosion and profit shifting inclusive framework for countries to jointly develop and apply codes of conduct 700/xtcey-lxco to address harmful tax practices related to fdi in attracting fdi and reducing price transfers and other fdi tax avoidance practices the international code of conduct for attracting fdi if developed and applied by many countries will set new rules of engagement in competing for fdi that will be based on these fundamental incentives