Hanoi (VNA) – This year marks 30 years since foreign direct investment(FDI) first entered Vietnam. Since then, FDI has contributed to the country’s socio– economic development by boosting exports, enriching the State budget andshifting the economic structure.

However, Deputy Minister of Planning andInvestment Vu Dai Thang said FDI is still used inefficiently, with nobreakthroughs in quality and volume recorded, and the country will need to makea strategic change to attract next-generation FDI.

According to Nguyen Noi, deputy head of theForeign Investment Agency (FIA) under the Ministry of Planning and Investment,as of late June, registered FDI in Vietnam totalled 331.2 billion USD, with180.7 billion USD disbursed.

Manufacturing and processing  attracted the lion’s share offoreign investment, with 189 billion USD, accounting for 57.1 percent of thetotal. It was followed by real estate, with 56.2 billion USD or nearly 17percent of the total.

Currently, 128 nations and territories areinvesting in the country, with the Republic of Korea topping the list in termsof value, followed by Japan, Singapore and China’s Taiwan.

However, experts said Vietnam has yet tomake a breakthrough in FDI attraction and use. The pervasive influence from theFDI sector on the domestic sector remains limited, not enough foreigninvestment has been draw into new technologies and links between FDI enterprisesand domestic projects are weak.

According to the Ministry of Planning andInvestment’s report on next-generation FDI attraction for 2020-2030, mostforeign investors are drawn by low workforce costs and incentives. However, thelack of skilled labourers is a barrier to growth, while the shortage of supplychains, quality suppliers and effective policies reduce corporatecompetitiveness.

To improve FDI attraction, Nguyen Mai,President of the Vietnam Association of Foreign Invested Enterprises, suggestedVietnam change its way of thinking in foreign investment attraction.

He proposed changing foreign investment plansby stepping up investment promotion, not promoting investment on a large scaleas at present.

Wim Douw, senior expert on trade andinvestment policies at the World Bank, stressed the need for Vietnam to have anew policy framework that prioritises high-quality FDI projects.

Economists recommended Vietnam build abusiness environment that matches corporate demand in the digital era.

It is also necessary to improve workers’skills, review preferential policies and open the door to several importantservice sectors to improve competitiveness and growth.-VNA