MARKET INFORMATION

Vietnam Continues to be an Ever-Popular Investment Market for Foreign Investors

Vietnam is expected to register a Gross Domestic Product (GDP) growth of 6.3 percent for 2011, an increase from 2010’s growth of 5.5 percent.

Vietnam has set a target of attracting US$20 billion in Foreign Direct Investments (FDI) in 2011. Deputy Minister of Planning and Investment (MPI) Dang Huy Dong, previously said that 2011 will see a prioritization of qualitative rather than quantitative projects. Therefore, priority will be given to infrastructure, high-technology and highly competitive export products.

According to the Ministry of Planning and Investment, FDIs accounted for 25.8 percent of the country’s total investments in 2010. This total investment includes US$1.47 billion in 93 newly licensed projects and US$86 million in additional capital for 14 existing projects.

Vietnam has now also welcomed the Public-Private Partnership model as a means of attracting investment and reducing domestic public debt. Dang Thanh Tam, Chair and Chief Executive Officer of Kinh Bac Urban Development Corporation, said PPP projects are stable and attractive to the investors with large capital.

Among investors, Singapore has become Vietnam’s biggest with 900 projects totaling US$23 billion.  In the first two months of 2011, Singapore poured an additional US1.1 billion of investments into Vietnam.

All of these figures underline investor confidence in Vietnam’s economy and business environment despite the global economic crisis of the past two years. Favorable conditions in 2011, both domestically and internationally, seem to favor Vietnam reaching its target FDI goal of US$20 billion this year.

Mining
Vietnam’s mineral resources include large deposits of bauxite, titanium and rare earth metals. It also has deposits of some 60 other minerals such as coal, copper, antimony, chromium, gold, tin, lead, uranium and zinc. The country has iron ore reserves of about one billion tons; chromite, 20 million tons and copper, 751,000 tons. Vietnam also produces one percent of the world’s tin and cement.

In 2010, the export value of Vietnam’s mining industry (excluding natural gas) was estimated at US$7.74 billion and accounted for 11 percent of Vietnam’s total export volume.  Mining, however, remains underdeveloped and is dominated by small scale mining firms.  

Realizing mining’s full potential requires further larger investments. In a bid to assist this initiative, the Vietnamese National Assembly has revised the Mineral Law originally issued in 2005. The revised Mineral Law now provides more stringent business performance conditions on mineral exploration licensing, mineral exploitation rights auctions, transfers of mineral exploration and exploitation rights.