The planning and investment ministry has submitted to the government a special report on foreign investment attraction after three years of Vietnam's WTO entry. The planning and investment ministry has submitted to the government a special report on foreign investment attraction after three years of Vietnam's WTO entry. According to the ministry's experts, the most valuable lesson from the practice is to know how to snap opportunities to streamline FDI flows in the coming time.

From 2007 to 2009, the country attracted 4098 foreign investment projects with total registered capital of $114.15 billion, nearly 4.5 times as much as the target set for the entire period of 2006-2010.

However, according to experts, Vietnam has just entered WTO for three years and is still gradually fulfilling the WTO commitments on opening the goods and service market. Investment activities often have certain delays; hence, assessing impacts of Vietnam's WTO entry on foreign investment requires longer time when recent investment projects will have come into stable operations. Currently, after the WTO entry, almost investment projects, particularly large-scaled projects, are completing administrative procedures, being built or have lately been put into operation. In addition, the world's economy has been heavily suffering from the economic recession, which has significantly hit Vietnam's economy in general and foreign investment in particular. Vietnam's economy is also facing high inflation, decreasing growth and risks of instability. Thus, assessing the impacts of the WTO entry on Vietnam's economy and foreign investment activities requires more time and information.
Looking back three years of the country's WTO entry, the planning and investment ministry said that the above positive results come from three factors:

Firstly, in order to fulfil the WTO member obligations, Vietnam has made adjustments for economic policies in a more transparent and clearer manner for businesses to open the goods and service market as well as domestic reform measures in order to snap up opportunities and overcome challenges during the international integration.

Secondly, the market for exported goods and services is opened. Foreign invested enterprises as well as Vietnamese businesses have penetrated into more markets, so, export of FIEs has significantly increased in three recent years and always account for high rate compared total export of the country. Additionally, businesses have more opportunities to access credit sources, modern technologies, different kinds of services, materials and export opportunities because the market is widely opened and is not discriminated.

Thirdly, with elimination of investment barriers, Vietnam has become one of the attractive destinations for investors, particularly since Vietnam officially became a member of WTO. According to economists, big changes of business investment environment have helped Vietnam have many new opportunities. The above figures of FDI attraction as well as investment disbursement of FIEs has demonstrated significant growth of the foreign investment sector after Vietnam entered WTO.

According to the country's WTO commitments, in addition to some open commitments, some other commitments have levied restrictions on investment, business conditions which are tougher than respective regulations of the current laws. This has adversely impacted Vietnam's investment environment, which makes foreign investors doubtful about consistency in Vietnam's foreign investment attraction policies.

Thirdly, the commitments on tax break have created more competitions for domestic economic sectors, particularly state-protected sectors.

From 22 practical years of foreign investment activities in Vietnam as well as three years of the WTO entry and from experience of some regional countries, experts of the planning and investment ministry said that Vietnam needs to snap up opportunities and identify difficulties, challenges from inside as well as outside in order to issue proper policies in order to encourage and attract foreign investment.

Source: http://www.intellasia.net/news/articles/economy/111286301.shtml