Foreign Direct Investment in Vietnam
There is no dout that foreign direct investment (FDI) plays a very significant role in economic growth, according to experiences of new industrial countries in Asia. Over a decade of opening for FDI, we could realize that the more FDI inflows pour into our country the more we benefit. In fact, FDI has contributed a great proportion to fulfill targets on socio-economic development plan and has been one of the most important external sources of Vietnam on the process of industrializing and modernizing the country.
Statistics shows that there was a sharp rise in FDI commitments in the period of 1998-1995. The number of investment projects go up at average 50 percent each year untill the end of 1995. In 1996, we suffered a slight setback compared with the previous year, just up 29 percent. Next, the trend in 1997 is for a decline in both the number and volume of FDI commitments and finally, it became a steady decrease in FDI inflows into Vietnam in recent years. What are the causes?
This essay will examine the issue above with the purposes:
1. To have an overview on FDI in Vietnam in the period of 1988 to 1997.
2. To identify the causes of decline in FDI in recent years (since 1997 till now).
3. To deriving useful lessons from the past and put forward some measures to induce FDI in future: creating a better investment environment.
In the scope of utilizing relevant literatures and various available statistical sources printed in the newspapers/magazines/web-pages to analyze the situation of FDI in Vietnam, fingures may differ a little bit from some other sources.
A. OVERVIEW ON FOREIGN DIRECT INVESTMENT INFLOWS IN VIETNAM FROM 1988 TO 1996
In 1998, Vietnam ...
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...es of Trade and of Foreign Affairs to organize international workshops and publish guide books and other documents to present investment opportunities in Vietnam.
Organize meetings and workshops to promote foreign investment in Vietnam in co-operation with foreign business associations.
CONCLUSION
"Storms in a tea cup" is the image that a Singaporean investors used to portray Vietnam's investment environment. Storms of opaque policies, bureaucrat, inconvenience, complicated procedures have continuously beat foreign investors down so that they have to leave Vietnam market to a better one. Therefore, changing Vietnam's investment environment from something shoddy to something fine is the most important thing that the government has to perform now. The challenge is great; success depends only on the strength of our will.
Bibliography:
The purpose of this paper is to provide a summary of the article called “Can We Keep Our Promises?” by Robert D. Arnott, and to help better understand the three key risks facing each investor.
The fact that majority of the capital funds was in the form of portfolio capital instead of foreign direct investment (FDI) had also worsen the situation. The ratio of portfolio capital to FDI had increased substantially from 1:1.3 in 1990 to 1:6.5 in 1993. Given the volatile nature, portfolio capital tends to respond with greater speed to changes in the environment.
To begin with, this research exposed a FDI puzzle between India and China through analyzing the current economic condition. Prime, Subrahmanyam and Lin (2011) stated, "Given their growth records, large markets, and reformed economic systems, both China and India appear to be equally likely candidates for foreign direct investment. Yet, China has received substantially more FDI" (p. 303).
During the 70?s the world entered a recession because ?the cost of economic growth of other industrialized nations began to rise rapidly?, the United States felt the effect. (AMSA, 2004, ¶ 14). With the development of other nations, came lose of industrial production for the United States of America. American Medical Student Association (2004) stated ?In 1950 we had 60% and by 1980 we only claimed 30% of the world production?, this brought higher prices as well as loses of jobs.
I found this article "Foreign direct investment: Companies rush in with the cash" on the financial times website (www.FT.com) published December 11, 2002 written by John Thornhill. The reason for choosing this article is my personal interest in the Chinese economy and its attractiveness to the foreign investors. Apart from the foreign direct investment this topic has also helped me in understanding the impact of Chinese economy on the global market.
Rao, S. , P. Sharma, and R. Acharya.Canada–U.S. trade and foreign direct investment patterns. Calgary: Calgary University Press, 2003.
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This paper will serve as a discussion on the topic of investment banking. In this paper the author includes various articles and thoughts that help to understand the background and principle of investment banking. This discourse will attempt to address this issue through explaining what investment banking is, introducing major investment bankers, and how investment banking affects our globally economy. Investment Banking Defined Investopedia (2008) stated this definition about investment banking, “A specific division of banking related to the creation of capital for other companies. Investment banks underwrite new debt and equity securities for all types of corporations.
Political and legal considerations were given first priority in this analysis with primary emphasis given to whether a country's legal or political system prohibits or impedes foreign investment. If a country's political or legal system discouraged or prevented foreign investment, that country was disqualified from further consideration. Factors considered when assessing the political and legal environment:
We all know that the foreign investment is a necessary part of global expansion. Many developed countries prefer to invest developing countries. For instance, the US has invested much more fund in China. Since the initiation of its market reforms in the 1980’s. China has been a preeminent recipient of foreign direct investment (FDI). Until 2011, there is over $1.2 trillion have been invest in China as foreign direct investment, it made Chinese industries has been transformation, and contributed enormously to the nation’s industrial output. In addition, the more foreign manufactures, the more Chinese subsidiaries have dominated (Wei, Xiao & Yuan, 2014).
In the year 2007, China and India ranked first and second respectively in the list of ideal foreign direct investment (FDI) destinations, according to A T Kearney, a global strategic management consulting firm (The Press Trust of India Limited, 2007a). The two nations, because of their similarities in geopolitical, economic and demographic aspects, are often compared with each other. To determine which one is more attractive for businesses to expand to, this essay will examine the business environment of both countries from the following perspectives: political/legal, economic, socio-cultural and technological.
Woodward, D. (2001). The next crisis?: Direct and equity investment in developing countries. London: Zed Books.
...MENT ENCOURAGEMENT OF GLOBAL BUSINESS FOREIGN GOVERNMENT ENCOURAGEMENT Governments also encourage foreign investment. The most important reason to encourage investment is to accelerate the development of an economy. An increasing number of countries are encouraging investments with specific guidelines toward economic goals. MNCs may be expected to create local employment, transfer technology, generate export sales, stimulate growth and development of the local industry. US GOVENRMENT ENCOURAEMENT The US government is motivated for economic as well as political reasons to encourage American firms to seek opportunities in the countries worldwide. It seeks to create a favorable climate for overseas business by providing the assistance by providing the assistance that helps minimize some of the troublesome politically motivated financial risks of doing business abroad.
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