Changing COVID-19 strategy key to economic recovery

FDI – a bright spot in economic picture

Foreign direct investment (FDI) attraction remains a bright spot in Vietnam’s overall economic picture despite numerous recent difficulties caused by the COVID-19 pandemic.

For instance, Taiwanese firm Polytex Far Eastern Co., Ltd increased its investment capital by US$610 million, while Japan’s Kraft Vina paper Co, Ltd also poured  US$611.4 million into the northern province of Vinh Phuc.

Elsewhere, August 30 saw LG Display Co., Ltd of the Republic of Korea also increase their investment capital by US$1.4 billion in the northern city of Hai Phong.

The northern province of Quang Ninh hosted a ceremony on September 19, granting an investment license to a US$400 million project by Jinko Solar Vietnam Co. Ltd, one of the leading manufacturers of solar panels in the world.

According to statistics released by the Ministry of Planning and Investment, Vietnam had attracted roughly US$22.2 billion in FDI by September 20, representing a rise of over 4% compared to the same period from last year.

Singapore topped the list of foreign investors, pouring in approximately US$6.3 billion, followed by the Republic of Korea with over US$3.9 billion, and Japan with US$3.3 billion.

Changing COVID-19 measures

Experts said it’s time Vietnam was prepared to live safely with COVID-19 in a new model as many countries in the world have adopted. In his role as Eurocham vice president, Nguyen Hai Minh underlined the need to adapt to the pandemic in line with both modern trends and in a global context.

The COVID-19 prevention and control strategy should be changed flexibly that is the key to economic recovery, he said.

He affirmed that despite the negative impact caused by the pandemic, European businesses consider Vietnam an attractive investment destination in the long term.  

Minh quoted a Eurocham survey saying the prolonged COVID-19 outbreak has negatively affected 60% of European businesses, forcing them to scale down production.

The extended enforcement of social distancing measures has exerted a significant impact on the activities of FDI enterprises, leading to a supply chain disruption and a shortage of workers, especially foreign experts.

However, many European financiers have chosen not to withdraw their capital from the Vietnamese market despite the COVID-19 challenges.

To retain foreign investment, Minh suggested that Vietnam speed up the COVID-19 vaccination process for employees of FDI enterprises, including European businesses, while simultaneously devising solutions aimed at living safely with COVID-19.

He also proposed removing obstacles for FDI enterprises by exempting quarantine period for foreign experts with a vaccine passport, as well as carrying out customs clearance procedures in a fast manner.