Vietnam’s Urgent Need to Attract Foreign Capital

A USAID survey finds reduced optimism among 2,000 foreign businesses operating in Vietnam, even though their revenue surged $300,000 on average last year to $1.3 million — for a 22% return on investment.  Just 39% say they are optimistic about Vietnam’s prospects for the next two years.

Most pessimistic are manufacturers, most of which chose to operate in Vietnam because of cheap labor, political stability and government incentives, but many have been frustrated by intellectual property issues, lack of accessibility to policymakers, protection of their capital and contract enforcement.

Vietnam’s government says it is responding urgently with new measures to attract FDI after officials were alarmed when registered capital in January was just 3% of FDI for the previous January — and a drop in the bucket compared to the $16 billion the government hopes to attract in 2012.

More on Vietnam’s foreign investment challenge

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