Difficult financial disbursement, unbridled investment and over-interest in the real estate sector have lead to ineffective use of investment capital in the past time. However, capital flows are channelling into many new areas with a high expectation of causing big changes in the future investment structure.
New attractive investment fields
Previously, investment capital sources were largely focused on real estate, steel and cement. However, in the recent time, processing and manufacturing industries have attracted huge capital flows, with an annual growth of 30.2 percent. Processing and manufacturing sectors attracted 275 fresh projects with a registered capital of US$3 billion and 106 operating projects to supplement US$653.6 million to their current scales, becoming the most attractive fields to FDI investors in the first nine months of 2010.
The second most attractive field to foreign investors is electricity, gas and water. They invested US$2.94 billion in the first nine months, up 24.1 percent. Impressively, the average scale of an investment project in this field was quite high, standing at US$145 million. This field outstripped the real estate sector which drew US$2.75 billion in the nine month period.
Noteworthy projects in this field include a thermal electricity plant in Quang Ninh province capitalised at US$2.1 billion by the AES-TKV Mong Duong Electricity Co. Ltd, a sponge iron production project by Kobelco Vietnam Steel Company in Nghe An province.
Several real estate projects cut down their investment scales. For instance, the 21st Century International Development Co., Ltd reduced US$31 million of investment capital for a resettlement project in Ho Chi Minh City or An Lac Trading and Supermarket Service Co., Ltd slashed US$6 million in a property project in Ho Chi Minh City.
Capital flow breakdown
According to a report on economic situations in the first nine months of 2010 by the Ministry of Planning and Investment, all sources of mobilised funds like public investment, FDI and ODA increased from the same period last year.
The ministry said total social investment capital in the first nine months of 2010 was estimated at VND602.8 trillion, up 19.8 percent year on year, of which the public sector contributed VND226.8 trillion, accounting for 36.8 percent and rising 17 percent year on year, and the foreign-led sector spent VND154 trillion, accounting for 25.6 percent and increasing 10.7 percent.
The disbursement of foreign direct investment (FDI) capital was estimated at US$8.1 billion in the January - September period, up 4.8 percent from a year ago. The country licensed 720 fresh projects with a total registered investment capital of over US$11.4 billion, down 13.1 percent in project but up 37.3 percent in value, and permitted 153 operational projects to raise their investment by US$783 million.
In September, Vietnam granted investment certificates to 62 projects with total registered capital of US$616 million, a sharp drop from 72 projects and nearly US$2.5 billion in August.
Also in the first nine months of 2010, 48 countries and territories invested in Vietnam. The Netherlands was the largest investor with US$2.2 billion, accounting for 18.2 percent, followed by South Korea with over US$2 billion, and the United States with US$1.87 billion.
Regarding ODA, international donors disbursed US$1.92 billion in the first nine months of 2010, of which about US$1.744 billion was soft loans and some US$176 million was non-refundable aid. The total value of ODA capital approved exceeded US$2.209 billion, of which US$2.108 billion was loans and approximately US$101.6 million was non-refundable aid.
According to the ministry, the amount of FDI capital into Vietnam reached nearly US$1.3 billion per month in the January - September period, much lower than previous years. In particular, the country attracted US$800 million in September, a decline of US$50 million from August.
Banks lent VND16 trillion for development investment in the first nine months, reaching 60.6 percent of the full-year plan. Export outstanding loans climbed to VND16.32 trillion and interest rate-subsidised post-investment loan was VND39 billion.
The speed of ODA disbursement was quickened but the growth was merely 11 percent in the nine months. Only the disbursement of State Budget was on the right track, reaching VND106.12 trillion, equal to 82.7 percent of the full-year plan. Localities managed over VND74.7 trillion, fulfilling 85.4 percent of the yearly plan. Many provinces had a large value of investment disbursements, including Ninh Binh, Hoa Binh, Ha Tinh, Thua Thien Hue and Hai Phong, Lam Dong and Hai Duong.
New attractive investment fields
Previously, investment capital sources were largely focused on real estate, steel and cement. However, in the recent time, processing and manufacturing industries have attracted huge capital flows, with an annual growth of 30.2 percent. Processing and manufacturing sectors attracted 275 fresh projects with a registered capital of US$3 billion and 106 operating projects to supplement US$653.6 million to their current scales, becoming the most attractive fields to FDI investors in the first nine months of 2010.
The second most attractive field to foreign investors is electricity, gas and water. They invested US$2.94 billion in the first nine months, up 24.1 percent. Impressively, the average scale of an investment project in this field was quite high, standing at US$145 million. This field outstripped the real estate sector which drew US$2.75 billion in the nine month period.
Noteworthy projects in this field include a thermal electricity plant in Quang Ninh province capitalised at US$2.1 billion by the AES-TKV Mong Duong Electricity Co. Ltd, a sponge iron production project by Kobelco Vietnam Steel Company in Nghe An province.
Several real estate projects cut down their investment scales. For instance, the 21st Century International Development Co., Ltd reduced US$31 million of investment capital for a resettlement project in Ho Chi Minh City or An Lac Trading and Supermarket Service Co., Ltd slashed US$6 million in a property project in Ho Chi Minh City.
Capital flow breakdown
According to a report on economic situations in the first nine months of 2010 by the Ministry of Planning and Investment, all sources of mobilised funds like public investment, FDI and ODA increased from the same period last year.
The ministry said total social investment capital in the first nine months of 2010 was estimated at VND602.8 trillion, up 19.8 percent year on year, of which the public sector contributed VND226.8 trillion, accounting for 36.8 percent and rising 17 percent year on year, and the foreign-led sector spent VND154 trillion, accounting for 25.6 percent and increasing 10.7 percent.
The disbursement of foreign direct investment (FDI) capital was estimated at US$8.1 billion in the January - September period, up 4.8 percent from a year ago. The country licensed 720 fresh projects with a total registered investment capital of over US$11.4 billion, down 13.1 percent in project but up 37.3 percent in value, and permitted 153 operational projects to raise their investment by US$783 million.
In September, Vietnam granted investment certificates to 62 projects with total registered capital of US$616 million, a sharp drop from 72 projects and nearly US$2.5 billion in August.
Also in the first nine months of 2010, 48 countries and territories invested in Vietnam. The Netherlands was the largest investor with US$2.2 billion, accounting for 18.2 percent, followed by South Korea with over US$2 billion, and the United States with US$1.87 billion.
Regarding ODA, international donors disbursed US$1.92 billion in the first nine months of 2010, of which about US$1.744 billion was soft loans and some US$176 million was non-refundable aid. The total value of ODA capital approved exceeded US$2.209 billion, of which US$2.108 billion was loans and approximately US$101.6 million was non-refundable aid.
According to the ministry, the amount of FDI capital into Vietnam reached nearly US$1.3 billion per month in the January - September period, much lower than previous years. In particular, the country attracted US$800 million in September, a decline of US$50 million from August.
Banks lent VND16 trillion for development investment in the first nine months, reaching 60.6 percent of the full-year plan. Export outstanding loans climbed to VND16.32 trillion and interest rate-subsidised post-investment loan was VND39 billion.
The speed of ODA disbursement was quickened but the growth was merely 11 percent in the nine months. Only the disbursement of State Budget was on the right track, reaching VND106.12 trillion, equal to 82.7 percent of the full-year plan. Localities managed over VND74.7 trillion, fulfilling 85.4 percent of the yearly plan. Many provinces had a large value of investment disbursements, including Ninh Binh, Hoa Binh, Ha Tinh, Thua Thien Hue and Hai Phong, Lam Dong and Hai Duong.
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