(VOV) Experts suggest  that Vietnam adopt policies to funnel foreign direct investment (FDI) into the right areas and avoid projects with outdated and environmentally-unfriendly technology. The suggestions were delivered Thursday at a seminar in Hanoi on ways to improve the quality of foreign investment flow into Vietnam.

Assembling cars at Japan's Honda factory in Vinh Phuc province

Since the first FDI projects came to Vietnam 25 years ago, this source of capital have positively impacted Vietnam’s socio-economic development. Each year FDI projects comprise more than half national import-export turnover. The sector has created some 2 million jobs. Vietnam currently has more than 13,500 valid FDI projects with a total registered capital of 200 billion USD. But economists say FDI attraction and management show some shortcomings. High tech projects are few, technological transfer is slow and investment policy is abused in some localities. This requires that the government re-orient its FDI attraction policies towards quality, efficiency and sustainability.  Minister of Planning and Investment Bui Quang Vinh says Vietnam does not hope to achieve all these goals immediately, but will begin by enhancing the quality of FDI. Nguyen Mai, Chairman of the Association of Foreign Invested Enterprises, says FDI should be channeled to areas where Vietnam has a competitive edge: “Our current policy focuses mainly on attracting FDI. We should shift to upgrading FDI and connecting FDI enterprises with domestic ones. We should be more aware of territories, localities, industrial zones and economic zones. Regional advantages should be indentified to attract appropriate investment.”

Cheap labor, am important factor in attracting foreign investment, will no longer be as attractive as previously. Vietnam’s workforce is abundant but lacks skilled workers. Phan Huu Thang, Director of the Center for Foreign Investment Studies, stresses human resources development as an important competitive edge in attracting investment. Phung Xuan Nha, Deputy Director of Hanoi National University, shares this view: “It’s the right time for Vietnam to seriously invest in training high quality personnel tailored to investors’ needs. The training of graduates and postgraduates should match international standards and demands so that foreign investors don’t have to retrain workers.

According to the Department of Foreign Investment, FDI this year will be concentrated in such areas as infrastructure, and green industry, and be part of the global value chain. Vietnam will refrain from licensing FDI in non-production areas, which raise the national import surplus, or in the production of steel and building materials, which causes environmental pollution.