This publication has been automatically translated. If you want to read texts translated professionally, please make a donation and help us develop the institute.
FDI in Vietnam
The latest data presented by the Vietnamese Foreign Investment Agency (FIA) shows that FDI in Vietnam in the first five months of 2019 reached the highest level in four years, amounting to USD 16.74 billion. The inflow is higher by 69.1% than last year. The Vietnamese government in January-May granted permits for 1,363 new projects with a total share capital of USD 6.46 billion, an increase of 38.7% compared to the same period last year .
From among 19 sectors receiving investment capital, production and processing came in first place with the result of USD 10.5 billion – which constitutes nearly ¾ of total FDI. The next in the classification is the real estate sector, with a total investment value of USD 1.1 billion. The third place was the retail and wholesale sector, with an investment value of USD 742.7 million .
The main catalyst for such a strong FDI growth in Vietnam is the ongoing trade war between the US and China. In combination with the recent entry into force of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)  and Free Trade Agreements between the European Union and Vietnam (EVFTA), this will provide significant opportunities for both incoming and outgoing investments for the upcoming patch. In addition, it is quite likely that Vietnam will continue to improve its legal standards to meet the requirements imposed by the aforementioned agreements, in particular with regard to the protection of intellectual property rights (IPR).
Countries directly and indirectly neighboring Vietnam are a significant part of the FDI mentioned. Hong Kong directs FDI at USD 5.08 billion, representing 30.4% of total investments in the first five months of 2019. The second and third place is placed by South Korea and Singapore, followed by China and Japan . It should be noted that China rapidly increased its investments in Vietnam, starting from the seventh place in the general classification of 2017. In 2018 they moved to the fifth place, and currently they are in fourth place. This can partly be attributed to the trade war between the US and China, but you can risk saying that China is also investing in Vietnam via proxy, which Hong Kong has become.
Hanoi retains the title of the most attractive destination for foreign investors, with a total FDI share of USD 2.78 billion. The second favorite place is Binh Duong Province, which this year received USD 1.25 billion. Northern Vietnam is rapidly strengthening its position as the main center for the electronics and heavy industries. All thanks to global conglomerates such as Samsung, Canon and Foxconn. The Lach Huyen port in North Vietnam has opened its “gates” – thanks to the proper deepening and new cranes, it can take super container ships. As a result, ships with goods for Vietnam do not have to sail to Singapore or Hong Kong, which saves about a week when it comes to transporting goods.
Both Binh Duong and the city of Ho Chi Minh in South Vietnam are the main industrial hubs specializing in the textile, leather, footwear, mechanical, electrical, electronic and wood industries. Southern Vietnam has become the main goal of renewable energy projects (RES) .
Investments of Vietnamese enterprises
Vietnamese companies at the turn of 2018 and 2019 invested almost USD 183 million in 69 projects abroad, which shows that local companies have also become more competitive internationally. Investments were mainly in the science and technology, banking and IT sectors. The largest number of investors attracted such countries as Spain, the USA and Cambodia. This year’s Forbes Global 2000 list lists four Vietnamese companies, including Vietcombank, BIDV, Vingroup and VietinBank, which shows how far Vietnamese companies have reached . Meanwhile, a recent report by DBS states that Vietnam’s economy may become larger than Singapore until 2029, if Vietnam maintains its current economic growth .
Three of the largest beneficiaries of FDI
According to the FIA report, production and processing, real estate as well as retail and wholesale are the three most important sectors that benefit the most from FDI in Vietnam.
Production and processing are still the main part of foreign direct investment. The Vietnamese Ministry of Trade believes that supporting industry is crucial to boosting socio-economic development. The government wants to restructure the industry to support domestic production. Industry experts say that Vietnam benefited from companies moving production to the country because costs in China began to grow. As the sector matures and Vietnam grows as a production site, investors’ shares will grow. However, there are still several aspects to improve. The development of the production sector is delayed by poor logistics infrastructure, which is becoming the goal of the government’s investment to be more efficient and fit the concept of Industry 4.0 , which Vietnam is seeking.
The Vietnamese real estate market, as in previous years, continues to attract foreign and domestic investors. It is estimated that increased tourist traffic and large infrastructure projects, such as the metro in Hanoi and Ho Chi Minh , will increase the demand for real estate. Office spaces are becoming more and more popular, several companies such as WeWork, Workyos, Kloud and CEO Suites opened their offices in 2018. The interest comes mainly from South Korea, Hong Kong and China. Tourist spots such as Da Nang, Nha Trang and Phu Quoc island are experiencing rapid development, and many hotels and apartments are under construction. The industry also records strong growth due to the growing middle class – which is also shifting to other sectors.
Vietnam has one of the fastest growing middle classes in the region, boosting significant growth in the retail and wholesale sectors. The middle class is predicted to reach 33 million by 2020, an increase of 12 million compared to 2012. According to the Deloitte report , the retail and wholesale market is expected to reach USD 180 billion by 2020 – this is increase by 26% from 2018. The government adopted a number of regulations that entered into force in 2014, mitigating certain restrictions imposed on foreign investors, such as direct participation in distribution systems. The main players are Lotte, Vingroup and Big C. Both local and foreign investors have increased their activity through various strategies, including mergers and acquisitions, franchises and other partnership models. This is most evident in Hanoi, Ho Chi Minh, Binh Duong, Dong Nai and Hai Phong. These areas have experienced strong growth in supermarkets, grocery stores and shopping centers. In addition, it is expected that the growth of trends in e-commerce and digital payments will become more pronounced.
What’s next with FDI in Vietnam?
Vietnam is expected to continue to maintain a high level of FDI in the coming years. The country attracts investors from all over the world because of its demand, but also the ease of establishing business contacts and finalizing projects. The main challenge for the Vietnamese government will be responsible management of development and legal reforms. However, as the market matured, the government began to favor high-value investments such as advanced technologies, production, tourism and high-tech farming. In addition, the government should reform education and higher education to meet the demand for a skilled worker who will certainly appear in a few years. Vietnam currently has ideal conditions for development – a trade war between the US and China, which does not show signs of weakening, free trade agreements with the European Union, cheap labor and young working population is like a large amount of sugar for wine yeast.
 Więcej: http://fia.mpi.gov.vn/tinbai/5888/FDI-disbursement-rises-9pc-to-9-85b-in-seven-months
 Więcej: https://www.evwind.es/2019/04/07/renewable-energy-the-future-of-power-for-vietnam/66692
 Więcej: https://asia.nikkei.com/Economy/Vietnam-on-track-to-overtake-Singapore-in-decade-DBS
 Więcej: https://www.pwc.com/vn/en/publications/2018/pwc-vietnam-industry-40-report-en.pdf
 Więcej: https://e.vnexpress.net/news/business/economy/hanoi-metro-stations-in-line-for-april-launch-3901949.html
 Więcej: https://www2.deloitte.com/content/dam/Deloitte/vn/Documents/about-deloitte/vn-about-transparency-report-bao-cao-minh-bach-9apr2019.pdf
A short note and photo gallery from the chairman of the Board of the Boym Institute, who stays in Rwanda at the "Kigali Global Dialogue" conference.
The debate was the consequence of positive reactions to the open letter that the Boym Institute published in the summer of 2020. Many of its readers pointed out the necessity of broad consultations regarding the principles of the new multidimensional policy in order to reflect the diversity of perspectives, interests and conditions.
The Adam Institute for Democracy and Peace is offering “Betzavta” facilitators, middle school and high school educators, social activists, communal activists and those assisting refugees an online seminar to explore educational issues related to wartime.
Evidence suggests that North Korea stores its high-level nuclear waste (HLW) in liquid form in tanks on the same site where it is made, and has not invested in infrastructure to reduce, dentrify, or vitrify this waste. However, this is just the tip of the iceberg, one of many aspects of the North Korean nuclear waste problem.Nicolas Levi
India’s current position towards the Russian invasion on Ukraine may damage its reputation as a major force of peace in the world
The course will be taught via interactive workshops, employing the Adam Institute’s signature “Betzavta – the Adam Institute’s Facilitation Method“, taught by its creator, Dr. Uki Maroshek-Klarman. The award-winning “Betzavta” method is rooted in an empirical approach to civic education, interpersonal communication and conflict resolution.
It is important to contribute to the understanding of what the New Silk Road can mean in economic, political, leadership and cultural terms for the European countries involved. This analysis should reveal the practical consequences of the Belt and Road Initiative for Europe in the case of Poland and Germany, as well as their respective social effects.
We would like to inform, that Observer Research Foundation has published article of Krzysztof Zalewski - the Boym Institute Analyst, Chairman of the Board and Editor of the “Tydzień w Azji” weekly.Krzysztof Zalewski
Book review of "Europe – North Korea. Between Humanitarianism And Business?", written by Myung-Kyu Park, Bernhard Seliger, Sung-Jo Park (Eds.) and published by Lit Verlag in 2010.Nicolas Levi
"We are at an inflection point in this century. Many of our traditional arrangements are failing. To achieve stability in this century we need to discover new solutions" - Interview with Samir Saran - Senior Fellow and Vice President at the Observer Research FoundationKrzysztof Zalewski
As the awareness of the scale and pervasiveness of climate impacts on human societies keeps rising, so does the frequency with which the terms “climate refugees” and “climate migrants” are being used in the public discourse “to describe those who are being displaced due to adverse consequences related to climate change” (Atapattu, 2020).Dawid Juraszek
Uzbekistan, under the leadership of President Shavkat Mirziyoyev, has embarked on a path of reform. Almost daily, the media there report on new initiatives and projects. It is no coincidence that in December 2019 The Economist awarded Uzbekistan the country of the year title.Magdalena Sobańska-Cwalina
Polish and Polish-founded companies are already on the largest continent in sectors such as: IT, educational technology, finance, marketing, e-commerce and space. Despite this, the potential lying dormant in the domestic innovation sector seems to be underutilized.
At the Boym Institute we are coming out with new initiative: #WomeninBoym, which aims to show the activity of this – often less visible – half of society. We will write about what women think, say and do. We will also publicise what women are researching and writing.
We cordially invite you to a workshop session “Liberalism vs authoritarianism: political ideas in Singapore and China”. The workshop is organized by Patrycja Pendrakowska and Maria Kądzielska at the Department of Philosophy, University of Warsaw on ZOOM.
Environmental problems transcend not only national borders but also historical periods. And yet debates on the necessary measures and timelines are often constrained by considerations of election cycles (or dynastic successions) in any given country.Dawid Juraszek
Indonesia is the largest Muslim democracy in the world. Approximately 88% of the population in Indonesia declares Islamic religion, but in spite of this significant dominance, Indonesia is not a religious state.Anna Grzywacz
The trade war is just one of the problems of confrontation between the United States and the People's Republic of China. Many aspects of this competition coincide in the South China Sea.Paweł Behrendt
Due to the spread of coronavirus, the following workplace recommendations have been issued by the Ministry of Development, in cooperation with the Chief Sanitary Inspector. We also invite you to read article about general information and recommendations for entrepreneurs.
This is the second part of an inquiry into Ulaanbaatar’s winning 2040 General Development Plan Conception (GDPC). In this part of paper, I look into some of the plans and/or solutions proposed in Ulaanbaatar’s 2040 GDPC.Paweł Szczap
Book review of "GDR International Development Policy Involvement. Doctrine and Strategies between Illusions and Reality 1960-1990, The example (South) Africa", written by Ulrich van der Heyden and published by Lit Verlag in 2013.Nicolas Levi
With China one of the key players in the global supply chain, supplying major manufacturing companies with commodities, components and final products, the recent emerging outbreak of Coronavirus provides for a number of organizational as well as legal challenges.
Interview of Ewelina Horoszkiewicz with prof. Chiwen Jevons Lee on China on globalization of Chinese business education and his thoughts of China’s role in the global marketplace.Ewelina Horoszkiewicz
Interview with Uki Maroshek-Klarman - Academic Director of the Adam Institute for Democracy and Peace in Israel. Founder of "Betzavta" method, which was created with intention of streghtening people's participation in society and making conflicts easier to solve.Patrycja Pendrakowska