Mr. Nguyen Ba Hung, Chief Economist of the Asian Development Bank (ADB) in Vietnam, discussed solutions for Vietnam to attract more FDI and increase the efficiency of public investment.
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| Mr. Nguyen Ba Hung, Chief Economist of the Asian Development Bank (ADB) in Vietnam. |
ADB believes that FDI is still the main driving force for Vietnam's economic growth. Sir, what should Vietnam do to attract more FDI?
In the context of increasing FDI competition in Asia, Vietnam needs to maintain and enhance its attractiveness through macroeconomic stability, improving the business environment and especially ensuring stable policy implementation.
First, effective institutional reforms need to be accelerated to improve the business environment. The current positive momentum in reforming laws on public investment, procurement, electricity and public-private partnerships needs to be maintained in the long term.
Expanding quality and sustainable infrastructure is critical. Vietnam must scale up public investment in infrastructure, including intermodal transport, digitizing customs processes, and providing clean energy, to remain an attractive destination for FDI.
A concerted effort is needed to redirect public and private investment into climate-resilient infrastructure. Vietnam should establish environmentally friendly industrial parks with advanced infrastructure to attract sustainable FDI.
Finally, the government needs to improve the skills of its workforce, especially in areas such as artificial intelligence, fintech, and the digital economy. To boost productivity, the government can strengthen public programs to encourage R&D, especially by linking research institutes with businesses in priority areas, including FDI in R&D.
In addition to promoting FDI, the Government is increasing public investment as a strong measure to attract private investment. How do you assess the importance of public investment in economic growth?
With significant headwinds and uncertainties in the global and regional economies, it is important to stimulate the domestic economy to balance the weakening external sectors. Among fiscal stimulus tools, public investment is particularly effective in boosting domestic demand for goods and services, thereby encouraging domestic investment and generating income for consumption.
Public investment in essential infrastructure also lays the foundation for more private investment in efficient services, leveraging completed infrastructure. Accelerating investment in quality infrastructure, including attracting FDI, in mega infrastructure projects is both an urgent need and an opportunity to boost growth.
Public investment could also be expanded for R&D,education and training of critical skills for emerging industries, contributing to sustainable development.
In recent years, Vietnam has introduced many measures to promote public investment disbursement. In your opinion, how can we solve this challenge?
Significant reforms have been undertaken to improve administrative efficiency and effectiveness, including changes to the Public Investment Law, the Bidding Law and related regulations. If implemented effectively, these reforms will facilitate faster project approval and implementation, improve the efficiency of public investment and support Vietnam to become an upper-middle-income country by 2030.
In addition to public investment, other fiscal measures to expand social spending, such as social safety nets or incentives to retrain a transitioning workforce, can offset the short-term negative effects of economic restructuring while accelerating the adjustments needed for long-term growth.
Public investment and fiscal stimulus, like many other government initiatives, require good coordination among ministries for effective implementation. In the current context, public investment projects need to be complemented by business environment reforms and capital market development to facilitate the development of private investment throughout the economy.
Source: https://baodautu.vn/day-nhanh-cai-cach-the-che-de-thu-hut-fdi-tang-hieu-qua-dau-tu-cong-d327982.html
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