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Ha Noi hopes FDI projects can bounce back from slow year   2009-07-22 - Viet Nam News

Ha Noi People’s Committee chairman Nguyen The Thao spoke to Dau Tu (Vietnam Investment Review) about measures to attract more foreign direct investment (FDI) to the capital city.

The number of FDI projects licensed by Ha Noi has dropped rapidly since the beginning of this year in terms of both value and volume. What are the reasons?

Impacts from the global economic crisis was the main reason. All localities, not just Ha Noi, have encountered difficulties in attracting FDI. In the first six months of this year, the city granted licences to 150 projects with a total capital of US$172 million, equivalent to 94 per cent and 15 per cent in the number of projects and value of last year, respectively. The total capital disbursement was estimated at $250 million, down 23 per cent.

How will Ha Noi attract FDI when the global economy starts to recover?

The city has mapped out plans to attract more FDI when the global economy starts to recover. Ha Noi is finalising a plan to create hi-tech industrial zones to draw investment and to create good infrastructure in those zones.

Foreign investors pay particular attention to two issues, including land and land clearance. To prepare land for hi-tech industrial zones and attract more investment projects, the city has created policies on land clearance to help investors carry out the task quickly.

Ha Noi will also speed up administrative reform to create favourable conditions for investors to deal with administrative procedures promptly.

What does Ha Noi need to do to be more competitive in attracting FDI than other localities such as HCM City, Binh Duong and Da Nang?

I do not think Ha Noi suffers from competition pressure with other localities in FDI attraction, because the city has many advantages, particularly in the field of hi-tech. The problem is how to effectively implement investment conditions and procedures for investors.

The industrial production value of Ha Noi in the first six months was estimated to have increased by 3.9 per cent over last year, in which, the level of FDI growth was extremely low at 0.2 per cent. Also, its export turnover saw a drop of 18.5 per cent. Which policies has Ha Noi created to help FDI-supported businesses overcome difficulties?

Many wholly-foreign invested businesses in Ha Noi met difficulties. We understood their difficulties and have worked with them to find solutions to help tackle difficulties to promote production. For example, Cannon company encountered difficulties in sales, and was urged to reduce production and the labour force. So what should be done is to maintain skilled workers for when the economy recovers. We proposed measures such as allowing workers to have more days off, rather than firing them.

For businesses focused on exports, we suggested they employ stimulus measures, including the application of deferred payments for customers or provision of tax reschedule.

What is the city’s FDI attraction target in the next six months of this year?

I think it is difficult to set a target for FDI attraction in the remaining months of this year. This depends on the efficiency of the stimulus package. Ha Noi will do its best to attract FDI effectively by many measures and efforts.

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