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LG Display Vietnam Hai Phong raising political uncertainties, and the Philippines the most severe, affecting industrial pro-
its investment by $1.4 billion in September, has an election coming up. All of this helps duction hubs and key economic regions
to a total of $4.65 billion, to expand the stimulate and maintain foreign interest in in the south, where many FDI enterprises
production of OLED and LCD screens, Vietnam, in addition to reductions on are concentrated.
among other items, in the northern port import tariffs for several large trading blocs The pandemic has also forced global
city. Many analysts believe that the arrival under free trade agreements (FTAs). Foreign companies to rethink their supply chains
or expansion of large FDI investors in investors still see Vietnam as a destination and be more flexible about production
Vietnam with high-technology represents in which to invest in and grow with. networks. It’s understandable that many
the initial stage of a new FDI wave. “The country has shown its resilience transferred orders to ensure production
Vietnam has proven to be a market of in terms of FDI attraction, and the gov- and business plans. The difficulties have
tremendous profitability with bright long- ernment’s response to the Covid-19 pan- been real and the concerns of foreign busi-
term economic prospects. “Vietnam pos- demic certainly helped establish its repu- nesses justifiable, and their recommenda-
sesses a strong and dynamic workforce, at tation in controlling the spread of Covid, tions need to be carefully considered. This
a cost that will remain competitive at least which many developed countries struggled also, however, confirms their desire to
over the decade to come,” Mr. Le Duy with,” said Mr. Kenneth Atkinson, Founder invest in Vietnam rather than leave.
Binh, Managing Director of Economica and Senior Board Adviser of Grant Thorn- Despite the growth, Vietnam has had
Vietnam, commented. “Infrastructure is ton Vietnam. “This year’s outbreak and to face tougher competition for FDI,
being improved, with more and more roads, lockdowns have of course brought a new according to Mr. Binh. Global FDI flows
ports, and bridges and other public utilities set of challenges and supply chain disrup- fell sharply in 2020 but recovered some-
being put to use. With 17 bilateral and mul- tions, but the country’s resilience again what in 2021. “While FDI into Vietnam
tilateral trade agreements signed, Vietnam surprised many foreign investors and added rose a mere 1.1 per cent in the first ten
is one of the most open economies in terms to its reputation rather than damage it.” months of the year, growth in East and
of trade and investment and has proven to Southeast Asia was a hefty 25 per cent,”
be a reliable partner since it opened wide to HINDRANCES TEMPORARY he said. “The regional competition really
foreign trade and investment.” Many experts believe that foreign- is fierce, and is a challenge that Vietnam
Social and political stability is clearly invested enterprises (FIEs) will not leave must face and overcome.”
another advantage Vietnam possesses. Its Vietnam because of any fleeting difficulties. Furthermore, he went on, Vietnam’s
investment climate is being continuously The latest figures from the General Sta- traditional comparative advantages in terms
improved due to the tireless efforts of the tistics Office show that FDI has increased of cheap labor and natural resources are
government. Macro-economic stability is despite Covid-19, expressing the confidence diminishing. The only way to outperform
yet another plus. In terms of the regional of foreign investors in the country’s ability elsewhere and become more attractive to
competition for FDI, Myanmar has lost its to resist and bounce back. The pandemic foreign investors is to create new compet-
luster in recent times, Thailand remains has nonetheless caused many difficulties itive advantages in a top-notch business
under military rule, which is of concern to for the business community since last year. environment with no impediments to for-
some investors, Malaysia also suffers from The ongoing fourth outbreak has been eign investment. Infrastructure and public -

Path forward Vietnamese exports grew 11 per cent in
the first 12 months of implementing the
EU-Vietnam Free Trade Agreement
(EUVFTA), with the EU’s exports rising
The suggestions contained in EuroCham’s recently-released Whitebook 12 per cent. This is a strong start, according
will help Vietnam rebound and recover, boosting trade and attracting to Mr. Cany, but is just the beginning.
more investment from Europe. “There are huge opportunities for EU-
Vietnam trade and investment post-pan-
demic, with the EUVFTA ushering in a
sector can work as one to boost EU-Viet- gradual reduction of tariffs and a mutual
nam trade and investment in the post- opening of markets,” he added. “If we
pandemic “new normal”. can unlock the full potential of this agree-
According to Mr. Alain Cany, Chairman ment - through partnerships between
of EuroCham in Vietnam, the 2021 White- governments and business communities
book provides insights and recommen- - companies and consumers on both sides
dations from the Chamber and its 18 will benefit.”
Sector Committees, representing European Meanwhile, the process of ratifying
companies of all sizes and in almost all the EU-Vietnam Investment Protection
industries along the length and breadth Agreement (EVIPA) continues in Europe.
of Vietnam. “If the issues we raise in the “Together, we need to accelerate the
he European Chamber of Com- Whitebook are addressed, we believe that momentum behind ratification, because
merce (EuroCham) and the Min- Vietnam will become an even more open, once in force it will encourage more
T istry of Foreign Affairs (MoFA) more competitive, and more attractive foreign investment from major European
co-hosted the “Meet Europe 2021: EU- environment for international investment enterprises,” Mr. Cany said.
Vietnam Partnership Post-COVID and and foreign enterprises,” he said. “We “Now that we have turned the corner
Whitebook Launch” on November 25 in want to support European business’s oper- in the fight against the pandemic, we
Hanoi, which brought together more ations and the government in its efforts should begin to focus on the future. Our
than 150 political and business leaders to attract more FDI to Vietnam.” aim must no longer be to just survive,
to discuss how government and the private Even in the midst of the pandemic, but to thrive.” %

www.en.vneconomy.vn DECEMBER 2021 | VIETNAM ECONOMIC TIMES | 11