Nov 30, 2012. Vietnam should offer more financial and non-financial incentives to attract more foreign investment into its hi-tech sector, Nguyen Mai, former vice chairman of the State Cooperation and Investment Committee, tells Vietweek.
Vietweek: Vietnam is encouraging investment in the hi-tech sector, but FDI inflow has been limited. Why?
Nguyen Mai: Over the past decade, our policy in FDI attraction has not changed much. In fact, we still place priority on labor intensive projects. Our incentives for hi-tech projects have not met the requirements of investors. In November, the government is expected to consider a report by the Ministry of Planning and Investment on the issue, and make new policies, including offering incentives to investors. Investors in the hi-tech sector will have different requirements compared to those in such fields as textiles and garments and footwear. Most hi-tech investors are from developed economies like the US, EU, and members of the Organization for Economic Cooperation and Development, who have stricter requirements on legal transparency and the guarantee of intellectual property rights.
We have not yet fully met the requirements of hi-tech investors, especially the big ones. Thus, the government should reconsider our current policies to meet these requirements.
Can you explain? How should we change our policies to lure more hi-tech investors?
The number of investors in the field is still small, but their investment capital is rather high. For example, Intel has poured US$1 billion into a factory in Vietnam, much higher than other projects with a registered capital of less than $100 million.
We should renovate our economic development model and restructure the economy, orienting it toward greater focus on hi-tech sector growth accompanied by highly qualified human resources, ensuring higher added value and economic competitiveness.
This will lead to a shift in the FDI inflow (increasing it in the hi-tech sector). We should select projects that bring in what our country needs, projects that help improve our science and technology capabilities. FDI into science and technology cannot change if our policies for the sector do not change. This is a very important point.