Vietnam's economy 2012 in the eyes of foreign investors

The world economy is shaky and uncertain. In this climate, Vietnam could emerge as a preferred destination for foreign investment if it seizes the opportunity. That is the assessment of foreign investors and world economists on the occasion of New year 2012.

According to economists, Vietnam’s economy is not insulated from global trends as it increasingly depends on the global economy. There will be some difficulty attracting foreign direct investment in the coming period due to problems besetting parent companies in foreign countries. At the same time, Vietnam is now being more selective about FDI quality, which to some extent, is affecting FDI flow into the country. However, economists say the disbursement of 10 billion USD per year of FDI capital during 5 very difficult years shows that Vietnam’s business environment and investment promotion policies are still attractive to foreign investors.

Studies indicate that Vietnam is still the bright spot in the region in terms of FDI attraction. Despite a falloff in FDI, there will be no significant foreign capital withdrawal in the long run. The Vietnam Chamber of Commerce and Industry reports that 66 percent of FDI enterprises intend to expand business in the next 2 years. And global market leader of Grant Thornton International, Alex A.MacBeath, says Vietnam will emerge as perhaps the biggest economic power after China, India, Brazil and Russia. EU ambassador to Vietnam, Franz Jessen shares this view. "I must mention the geographical site of Vietnam. Vietnam is in the area where trade is growing very fast including India and South Korea. Vietnam must seize this opportunity to create favorable business environment for investors. EU enterprises have always taken into consideration of where they can do business best and Vietnam is on the top of the list".

Andrew Simon, Regional Director of the International Finance Corporation is also optimistic about Vietnam’s economy in the context of global recession. Mr. Andrew says the Vietnamese government aims to recover the growth rate and will adjust monetary policies to help Vietnam maintain its growth rate in 2012: "If we look at 2012, the global economy is still have great impacts on the business prospects in Vietnam. But I think during 2012, we’ll see the efforts to maintain the stability of the economy from the government, and also the restructuring of the banking sector and the reform of enterprises. 2011 has been a tough year for Vietnam but growth has held up around 6 percent".

Vietnam has become a safe destination for foreign investors to escape the negative impacts of global and regional economic crisis.

Economists say Vietnam will have many opportunities this year to sustain its growth. Vietnam’s global integration, especially its participation in the Trans-Pacific Partnership will help its economy absorb more technology and investment capital from the outside world. But there still remain challenges ahead relating to administrative procedures, information systems, energy and transportation. Chairman of the European Chamber of Commerce and Industry, Alain Cany: "The business’s confidence in Vietnam is going down due to some reasons such as macro economy situation, high inflation, high interest rate. We hope that in 2012, we have dialogues with the government, we will have some drastic measures being taken to improve the business environment". 

Global integration has given Vietnam both challenges and opportunities, but the most important thing will be what the country does with opportunities to  sustainably develop its economy.