In a speech delivered at a conference reviewing 30 years of attracting foreign direct investment (FDI) held in Ha Noi on Thursday, Phuc said after three decades of economic reform, the FDI sector remained an indispensable part of Viet Nam’s economy.

As of August 20, the country had 26,500 valid FDI projects with total registered capital of US$334 billion. Of the sum, about $184 billion has been disbursed. FDI disbursement accounted for an average 18-25 per cent of total investment for the development of society during 1991-2017.

During the 30 years, Viet Nam has overcome challenges to become a middle-income country, averaging annual growth of 6.6 per cent.

According to Phuc, Viet Nam’s decision to open its economy to FDI has proven decisive, helping the country achieve multiple socio-economic development objectives. The move has been in line with Viet Nam’s effort of integrating into the global economy and enhancing its status in the international arena.

"Viet Nam is one of the most successful countries in the region and on global scale in terms of FDI attraction," Phuc said, adding that it has become a reliable and effective investment destination for foreign investors.

Viet Nam has consistently placed in the top 12 most successful countries for FDI attraction.

However, Viet Nam faces a number of challenges to its sustainable development, especially in the context of the Fourth Industrial Revolution, he said.

In Viet Nam, most FDI enterprises have been used low to medium technologies, while few high technology corporations at global level invest in the country.

Additionally, linkages and technology transfer activities between the FDI and domestic sectors have been below expectations.

Current FDI projects in Viet Nam mainly focus on assembly and processing stages with low localisation rates, resulting in low added value.

“There are also risks of environmental pollution and foreign-invested companies engage in transfer pricing and tax evasion,” Phuc stated.

He said Viet Nam would be more selective with FDI in the future and will play an active role in choosing suitable projects.

Viet Nam will not only attract foreign capital, but also promote co-operation through M&A activities between domestic and the FDI sectors, ensuring environmental protection and social benefits. Vietnamese enterprises should explore opportunities to acquire foreign companies, in turn acquiring technologies and distribution channels.

Viet Nam prioritises environmentally friendly projects using modern technologies, he said.

In addition, he said the country wants intensive-labor projects in rural areas and high tech projects in urban areas.

According to Phuc, this is considered a way to achieve inclusive growth. The PM stressed the importance of maintaining a stable macro economy, developing infrastructure and quality human resources.

Minister of Planning and Investment Nguyen Chi Dung said the attraction and use of FDI in the past 30 years have proven that the open door policy of the Party and State is a correct choice.

Viet Nam has risen to a middle-income country, with constantly enhanced position and prestige in the international arena.

Dung noted that with the entrance of foreign investors, many service sectors such as finance-banking, insurance, auditing, maritime transport, logistics, education-training, healthcare and tourism have developed remarkably.

The foreign investment inflow is also a factor behind the formation of new space for development, new urban areas, industrial parks, for export processing zones and economic zones, he said.

The minister stressed the foreign-invested sector has transferred advanced technology, know-how and experience in many industries and fields, producing ripple effects on the domestic sector, thus improving the technological level and management of Viet Nam’s economy, despite certain limitations.

The attraction and use of FDI has also contributed to perfecting institutions of the market economy, improving the investment and business environment, expanding external relations and promoting international co-operation, he said.

Minister Dung said the conference provides an opportunity to look back at 30 years of development of foreign investment in Viet Nam, and assess positive outcomes along with limitations and shortcomings, as well as their causes.

Based on such assessments, the conference will seek solutions to enhance the quality and effectiveness of FDI attraction and use.

According to the minister, the outcomes of the conference will serve as reference for the Ministry of Planning and Investment to complete a master plan on directions for FDI attraction and use until 2030.

“We hope foreign investors come to Viet Nam with good will and responsibility, along with specific and result-oriented commitments and actions to do long-term business on the basis of harmonizing the interests of investors, the State and the community,” Dung said.

Nicolas Audier, the European Chamber of Commerce in Viet Nam (EuroCham)’s co-chairmen said new trade agreements, including the under negotiation EU-Viet Nam Free Trade Agreement (EVFTA), would create opportunities for Viet Nam’s development.

The EVFTA is set to help Viet Nam access a 500 million people market in the EU.

With a more attractive investment environment, strong prosperity, a rising middle-income class and qualified labour force, Viet Nam would be an ideal destination for foreign investors, he said.

Tomaso Andreatta, co-chairman of Viet Nam Business Forum, suggested Viet Nam’s agencies should think about solutions to maintain its current investors while attracting more quality investors to the country.

According to Andreatta, the key is to teach workers skills to operate automation technology in Industry 4.0. The country should promote independent vocational training companies. Successful countries must have a good education system and Viet Nam must continue to reform education.

Witnessed by Prime Minister Nguyen Xuan Phuc, 24 investment co-operation documents were signed at the conference.

Of which, there was a memorandum of understanding between the Ha Noi People’s Committee and China’s Jiayuan International Group on the investment and construction project to build a software park and ICD in Ha Noi with total investment of $1.5 billion.

The ministry also allowed Lotte Rental Company Limited to increase its capital by $72 million, and gave investment licenses to Solarpark Huong Son and Cam Xuyen Solar Power Plant for GA Power Company with total investment of $46.6 million and LG Display Company Limited with additional capital of $500 million.

VNG and Singaporean Temasek Holdings investment fund signed a deal on seeking investment opportunities and expanding business co-operation in areas including online games, connection platforms, electronic payment and cloud services.