http://news.xinhuanet.com/english/2008-06/...ent_8414444.htm

this sort of figure while spectacular is also raising a concern about how to handle this influx of investments. china has about 80B fdi in 2007 for a population of 1.3B which is 17x that of vietnam, yet their fdi is only 4x larger. the current inflation problem stems partly from having too much cash flow in the econ. should get investors into manufacturing, technology and infrastructure instead of real estates but that's not an easy thing to do.

I don't like the fact that this is reported by Xinhua.

I don't like the fact that this money will likely cause even more overheating of the economy (strange, I know)

Nah, it was announced publicly when Nguyen Van Giau & Vu Van Ninh having a online conference with investors from Hanoi, HCMC, Singapore & Hongkong.
True, Vietnam economy is small but it attracts huge FDI, that also contributes to our trade deficit and only ~7.5% of our import are consumer products. I think the government has recently raised import tax on luxury car, mobile phones, cosmetic products.

$30 bil is just a figure. There is a huge difference between a project that is granted the investment license, hence counting toward the figure of FDI attraction...and a project that investors actually carry out and disburse capitals into VN. The percentage of FDI capital disbursement into VN was only 28% of the total FDI capital investors received investment license last year and the figure is keep going lower every year.

Even if VN attracts $40 bil of FDI this year, expect actual FDI capital disbursement into VN no more than $10 bil. Now, when investors want to build a manufacturing factory, they'll import into VN their machineries and their employees for their operation. Those costs would probably make up 50% of the total FDI capital disbursement already. Hence, the actual FDI capital that flows into Vietnam out of those $40 bil of FDI investment will be no more than $5 bil usd................

That's right, but I dislike Xinhua reporting it when I search the news in Google. They should stick to what they are good at, e.g. Tibet, and not trivial regular announcements from VN

Thanks for the clarification.

who give a $hit about an article written by a doggy newspaper

Current earning from tourism ~$5 bil and remittances from oversea Vietnamese ~$5 bil are pretty much the same as the actual figure of FDI capital inflow to VN. I think VN has a better chance of earning $10 bil from tourism or receiving $10 bil of remittances then getting actual $10 bil of FDI inflow

i respectfully disagree. the real estate boom was fueled directly or indirectly by the fdi. if memory serves me right, 80% of the fdi went into real estate (resort, upscale apts, offices etc.). this is an insane number! china put a constraint on which area you can invest in, but vietnam chose to go into a different path - a more open market. not saying which one is better. china always had trouble with inflation during 1995-2000 where they also saw 25% at one time. last year, fdi redisbursment was around 8B out of 21B...this year it should be higher. the lower percentage of lower redisbursement is expected. when you receive $100M of fdi, it's easy to have 80M (80%) of redisbursement. when you have 40B of fdi, it should be naturally much lower due to the size of these projects.

Last year, FDI disbursement was 28%, not $8 bil....I posted an article about this a while ago.

Since you talk about FDI in real estate I can say that real estate investment only benefits a few but not a lot of Vietnamese. Why? Because a billion of investment in an assembly workshop creates thousand of jobs while an investment of a billion in real estate creates how many jobs for a resort or an office building to operate? You want an investment policy that facilitates many jobs because people are having jobs and they are getting paid with low wages, they can only afford to buy cheap goods = opportunity/incentive for domestic Vietnamese enterprises to invest more in manufacturing to meet the demand of these consumers. More investment by Vietnamese enterprises will facilitate a stronger development of our domestic economy and branded goods.

{For instance, $8 billion was disbursed out of a total registered FDI of $21.3 billion last year, according to the FIA. There were now 8,600 foreign-invested projects pending or in progress nationwide, with $85 billion in registered capital, of which only $30 billion has been disbursed.}
http://english.vietnamnet.vn/politics/2008/06/789997/


my previous post countered one of the earlier posts of yours implying that fdi didn't impact the inflation in vietnam (or maybe, that was what i gleaned out of explanation about "real" fdi vs pledged one). i argued that fdi directly and indirectly contributed significantly to the current inflation problem that vietnam is facing. the art of handling and balancing these available investments without raising too much the cost of materials, labor, goods is quite tricky. of course, the hardest hit ones in this inflation storm are those poor folks making a few dollars per day.