VietNamNet Bridge – The figures released recently about Vietnam’s outward investments have raised worries about the quality of outward investments.
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The total investment capital of the projects is about 23.7 billion dollars, of which Vietnamese investors have contributed 10 billion dollars.
After the long arguments about the efficiency of foreign direct investment (FDI) in Vietnam, the quality of Vietnam’s outward investments has become a hot topic.
In the last few years, many outward investment projects by Vietnamese enterprises have been reportedly successful, especially the projects in the technology and telecommunication, aviation or fertilizer supply.
According to Bui Tuong Lan, Deputy Chair of the Vietnam – Laos – Cambodia Economic Cooperation Development Association (Vilaced), after several years of making investments in Cambodia, Viettel has been holding nearly 50 percent of the market share in telecom services with the expected turnover of 250 million dollars in 2011.
The projects in mining, fertilizer, urban development and aviation cooperation in Cambodia and Laos have also brought initial results and promised high prospects.
However, the figures released recently have raised the worries about the wave of making outward investment. FIA believes that it is necessary now to set up a channel to “filter” outward investment projects based on the criteria such as the profit transfer, the contribution to the export and job creation, in order to better control the outward investment.
According to FIA, in the first two months of the year alone, 16 outward investment projects in nine different investment fields were registered with the total registered capital of 1.264 billion dollars. The surprising thing is that the volume of outward investment capital in the first two months of the year was just 300 million dollars lower than the registered FDI during the same time.
These include three big projects in the electricity and water, air conditioner production and distribution with the total registered capital of 1.2 billion dollars.
As such, the average investment capital of an outward investment project is 79 million dollars. Meanwhile, a foreign invested project in Vietnam has the modest average investment capital of 14.6 million dollars.
The released figures have raised the worries that the foreign currency supply and demand in Vietnam would be badly affected by the gap of the capital inflow and outflow. Therefore, experts have called on government agencies to apply necessary measures to tighten outward investment.
However, Dr Nguyen Minh Phong, from the Hanoi Socio-Economic Research Institute, though admitting that this may have influences on the foreign currency market, still believes that the influences will not be big. He believes that it is more important to consider the outward investment structure.
“In the context of the international integration, Vietnam opens its doors to welcome foreign investment and it also has to open its doors for domestic enterprises to make outward investment,” Phong said.
Phong sees the outward investment is an inevitable thing which comes in line with the international practice.
“Vietnamese enterprises have the right to build their business plans for global operation, unless the plans violate the laws,” he said.
However, experts have warned that many investors have made the corrupt use of the outward investment to transfer money abroad illegally for many purposes. They may try to evade taxes, or transfer money as a method of laundering money. Therefore, they have urged the government to apply a “filtration” mechanism which allows to better manage outward investment.
Source: TBKTVN
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