Role of Foreign-invested enterprises in Vietnam

Ha Noi, Nov. 2 (VNA) -- Foreign-invested enterprises (FIEs) in the country have posted an industrial output value of VND 6,648 billion in October, an increase of 20.1 percent over same period last year.

This brings the total in the first ten months to VND 59,763 billion, up by 17.5 percent over last year, and accounts for 36 percent of the country's total industrial output. The oil and gas sector made up VND 18,378 billion of the total output.

FIEs in industrial production are involved in 31 of the 34 key product sectors in the national economy and can be said to account for 100 percent of production of monosodium glutamate, cars, and oil and gas.

They also account for between 30 and 50 percent of cement, ceramic tiles, sanitary ware and silk production, and between 50 and 60 percent of steel, televisions, soaps and motorbikes.

In other sectors, the FIEs have posted a USD 500 million turnover in October, totalling USD 4.7 billion in the first 10 months for an increase of 47 percent over last year.

The FIEs have made remarkable strides in exports with a 50.8 percent year-on-year increase in turnover over the first ten months at USD 5,524 million, according to the General Statistics Office (GSO). The exports turnover in October was around USD 630 million.

The production and exports have been attributed to amendments effected in the Foreign Investment Law. FIEs now account for about 47.4 percent of the country's total export turnover and have created 335,000 jobs, 20 percent more than last year.

Despite the success of FIEs and policies issued by the Government to encourage further investment, economists reviewing the past 10 months say there are several problems that need to be addressed.

They noter that the FIEs' capital disbursement has so far reached USD 1.084 billion, a 12 percent reduction compared to the same period in 1999.

They say that with the signing of the historic Viet Nam-US trade pact, it has become even more important that the Government further simplifies administrative procedures, facilitate project implementation and reduce service expenses.

These measures will attract more foreign investors who can make even greater contributions to Viet Nam's economic growth, the economists say.

Government's figures show that 200 new projects have been registered and licensed this year with a total value of USD 500 million, and 73 ongoing ones have received additional capital infusions of more than USD 225 million.

The GSO reports that there are more than 1,200 FIEs operating in Viet Nam now, and another 1,000 are set to begin operations in the near future.