FDI Takes a Fall, They Say

Good news, Bad news...

FDI to Vietnam is down a lot. Or is it?

The numbers are confused because Vietnam insists on making a big deal about how much it approves and licenses, when the only number that makes any real difference is DISBURSED FDI.

Approved FDI dropped 77% in the first half, reads the headline, but who cares, if much of this investment may never be realized.

2009 1st Half, New FDI licensed: $4.7 billion down 86.7%
2009 1st Half, FDI disbursed: $4.1 billion UP 13.8%

So is the glass half full or half empty?

You decide...

FULL STORY

Vietnam FDI plummeted 77 percent in first half

Foreign direct investment (FDI) in Vietnam dropped by 77.4 percent to US$8.87 billion in the first half of this year, according to a Foreign Investment Agency official who said the figure was not a bad one.

Agency statistics showed that 306 new projects worth $4.7 billion were licensed between January and June, down 86.7 percent in value over the same period last year.

During the period, $4.1 billion was poured into 68 operational projects, up 13.8 percent year-on-year, according to the agency, which operates under the Ministry of Planning and Investment.

Agency head Phan Huu Thang said the FDI result was positive given the extent of the current economic slowdown. He said the figures showed that investors believed in Vietnam’s moves toward a quick economic recovery and future development.

Some investors are currently negotiating with local authorities to invest in 187 projects worth $85.4 billion between 2009 and 2010, he said.

Vietnam is expected to lure some $20 billion worth of FDI in 2009, while $8 billion worth of FDI is expected to be disbursed in the same period. In 2010, the FDI disbursed is expected to increase to $9 billion.

Last year, the country enticed $71.7 billion worth of FDI, of which $66.4 billion came from 1,557 new projects, while the rest went to 397 operational projects, said Thang.

They really need to drop this obsession with approved investment once and for all, or at least make more clear what is really disbursed.