Vietnam needs to look further, not just rely on FDI attraction

At the event announcing the Review report on the afternoon of December 17, the World Bank (WB) expert assessed that Vietnam's external economic sector continues to grow strongly and is the biggest growth engine of Vietnam. Vietnam in recent years, especially in 2019.
Mr. Jacques Morisset, the chief economist of the World Bank in Vietnam, said that FDI inflows have had a big change over the past few years. Before 2016, investors coming to Vietnam poured capital into Vietnam to build new production and business establishments. But from 2016 onwards, FDI has mainly flowed into mergers and acquisitions.

He said that in the coming time, Vietnam should focus on developing the domestic market instead of depending on the external economy. Vietnam will have to rely on the dynamics of the domestic private sector. This is a challenge now and in the future.

Vietnam's private enterprises still face many obstacles, of which access to finance is the biggest problem. Most small and medium enterprises in Vietnam have difficulty in accessing bank credit and finance.

"If you want to grow fast, you have to create jobs, if you want to create jobs, you must develop small and medium enterprises. And to do so, they must have access to capital," Mr. Morisset said.

"FDI is the engine of growth for Vietnam and investors will continue to pour into Vietnam - a stable market with an open economy. It is difficult to find a place like Vietnam in the world. However, planners Policy makers have to wonder how much FDI will bring to the people ", the WB's expert emphasized.

Currently, FDI into Vietnam no longer creates as many direct jobs as before. Factories with FDI capital no longer use much labor, but instead are robots. Therefore, instead of just stopping at direct impact (job creation and export), Vietnam needs to strengthen the connection between FDI and domestic enterprises, to create indirect jobs, and stimulate economic growth. domestic.

Besides, Vietnam also needs to diversify FDI into new areas. "Vietnam needs to diversify its agriculture, need to plant more trees, take advantage of FDI and strengthen connectivity with this region. Vietnam needs a better connection with the end of its exports. Men are changing, but in the right direction or not is another story, "Mr. Morisset said.