In the first three months of this year, the number of foreign businesses coming to Vietnam rose sharply to more than 13,000, up 34 percent. Many big business delegations from industrialised countries, including the US, Japan, the Republic of Korea and Germany increasingly came to Vietnam to seek business and investment opportunities.

Many international seminars held recently in Vietnam gave optimistic forecasts about Vietnam’s FDI attraction. Despite a long Tet holiday, the first quarter saw positive results of FDI attraction and implementation.

In March alone, 102 FDI projects were newly licensed with a combined investment capital of around US$441 million and 30 operational projects were expanded with additional investment of US$291 million. Therefore, the country attracted around US$2.052 billion FDI capital in the first quarter of this year, achieving nearly one-third of the annual target. US$1.625 billion came from 215 new projects and US$426 million from 68 expanded projects.

Noteworthy are two major projects – the western Ho Tay (West Lake) Urban project invested by the Republic of Korea at a total value of US$300 million and the US Intel Group project in Saigon Hi-tech park in Ho Chi Minh City worth US$605 million.

This showed Vietnam’s positive changes in attracting FDI. In addition to luring new sources, the implementation of licensed projects also achieved progress. Total FDI capital disbursed in the first quarter of this year was estimated at US$830 million, an increase of 14 percent from a year ago. However, to fulfil the set target of disbursing more than US$3.5 billion in 2006, investors and relevant agencies should speed up the implementation of licensed projects.

Thanks to the operation of newly licensed FDI projects, the FDI sector has great strides in production and business activities. In the first three months of 2006, its revenue reached US$4.95 billion, a year-on-year increase of 29 percent, while its exports fetched US$3.041 billion, up 31.7 percent from a year ago. Crude oil alone generated nearly US$2 billion, up 16.1 percent. Notably, the FDI sector has secured an export surplus, with export value of US$5 billion and import value of US$3.253 billion. It has proved to be the most dynamic sector in the national economy, with its export growth of 31.7 percent (excluding crude oil) compared to 13.8 percent obtained by the State business sector. Its industrial production value also increased by 21.2 percent (excluding crude oil), while that of the State business sector rose by merely 9.9 percent.

To facilitate the licensing process, cities and provinces will be permitted to license projects capitalised at up to US$50 million instead of US$5-10 million at present. The MPI expects that the move will clear off barriers in the appraisal and licensing process, meeting the new requirements for FDI inflow when Vietnam joins the World Trade Organisation.