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FIA says problems existing in FDI management
Even the state officials who release the figures about foreign direct investment (FDI) themselves are not sure about the figures they release.
Figures speak for themselves
“Honestly speaking, we have problems with the statistical work,” said Director of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment (MPI) Do Nhat Hoang.
The FIA is taking responsibility for updating figures about FDI which are used for forecasting and planning, but it cannot get accurate figures, especially when different agencies are being decentralized.
“Local departments say they do not have updated figures because they have not received reports from enterprises. However, FIA cannot say to MPI that it does not have updated figures because it does not receive reports from local departments,” Hoang said. “We still have to submit reports on schedule, so that MPI can submit reports to the government”.
Hoang admitted that FIA has been trying to update figures through different sources, but sometimes he does not feel secure about the figures.
The big problem is that even the figures about FDI implemented capital, which are considered useful in helping to offset the current balance deficit and stabilize the balance of payments, are not very accurate., Generally, officials are not sure about the figures they release.
“Previously, we provided exact figures on FDI implemented capital, but now we are not confident in the figures because even local authorities cannot update information,” Hoang said.
Meanwhile, with decentralization, under which local authorities have the right to grant investment licenses to investors, the sanctions on violating regulations on providing statistics figures have become ineffective.
“I feel that the sanctions are not strong enough to punish the violators. No one will be punished if he or she does not submit reports,” Hoang said.
The problems in with the statistical work can partially explain why a lot of foreign invested enterprises continuously report losses to evade taxes.
The solution for the immediate time, according to Hoang, is that management agencies will make public the names of the enterprises which have to pay in arrears. He has also urged to take necessary measures to find the enterprises which evade tax and make price transfers.
The “bait” getting less attractive
Another worry for FIA, the agency in charge of promoting FDI, is that the “bait” has become less attractive. Simply stated, the conditions to lure foreign investors have worsened.
The political uncertainties in Thailand were thought as the golden opportunity for Vietnam to attract FDI, especially when foreign investors are trying to seek non-China and non-India markets. However, Vietnam has not witnessed any breakthroughs in FDI in recent years.
“Our policy on offering incentives is problematic,” Hoang said. With the Decree 24 on corporate income tax, the business fields which can enjoy incentives have been narrowed.
“We now have 20 antennas (Vietnamese counselors who help promote investment) in foreign countries. They all say that with less incentives, it is now very difficult to persuade foreign investors to invest in Vietnam,” Hoang said.
Meanwhile, existing investors in Vietnam complain about the electricity shortage, saying that the electricity cuts have been badly affecting their business plans.
Hoang has also warned about the new wave of foreign invested enterprises shifting from production to distribution. Instead of making products in Vietnam, the enterprises have been importing products to sell domestically.
“We have to approve the shifting, even though we do not want this, because we have to follow WTO commitments,” Hoang said.
vietnamnet, TBKTVN
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