In fact, FDI businesses are one of the most dynamic sectors taking the lead in export activities, contributing to the state budget, and generating jobs for workers.

However, many FDI projects have proved ineffective and many economic experts and policy makers say that it is high time to say no to inefficient ones.

FDI businesses made up 55 percent of US$19.25 billion in trade turnover in the first quarter of this year. Although FDI registered capital in Vietnam reached US$2.37 billion in the reviewed period (only 67 percent of last year's figure), this is a positive sign. The figures have shown that FDI businesses have played an important role in the national economy.

Yet, in recent years, we have witnessed a boom and withdrawal of billion-dollar FDI projects in many provinces and cities nationwide. The emergence and withdrawal of hundreds of billions of dollars are attributed to the world’s economic crisis and investors' opportunism. Many of them seized the opportunity to exploit natural resources such as land, forest, and mineral ores and a cheap labour force in Vietnam along with investment incentive policies. Not only have newly-registered projects withdrawn their licences, but also projects which have been ongoing for many years but have not used land funds sufficiently.

Another alarming problem is that many FDI projects which have consumed a lot of materials, fuels, energy, and created environmental pollution have been allowed into Vietnam due to the loopholes in policies and laws. Recently, environmental pollution of the Vedan Joint Stock Company in the Dong Nai River is another typical example for inefficient foreign direct investment.

Some economists have also pointed out a phenomenon that foreign investors have invested in the automobile industry to make a profit. After nearly 20 years of enjoying incentive policies, the sector’s localization rate reached just seven percent, lower than the set target of 30 percent in 2006.

According to a recent survey of more than 1,000 FDI businesses by the Vietnam Chamber of Commerce and Industry and the US Agency for International Development (USAID), a FDI business is a rather small unit which tend to export their products, earn low profit and do outsourcing work for bigger nations. Another problem is that these businesses have not cooperated well with domestic producers and are not able to establish a chain of supporting businesses.

Over the past five years, there have been only VND45 billion of investment poured into the national economy, helping the industry sector increase by just 0.5 percent of the total GDP.

In conclusion, investment attraction should be closely associated with economic restructuring. Therefore, it is important to say no to inefficient FDI projects which consume a lot of the nation’s natural resources and cause harm to the environment.