La nguyentiendung sum

For that reason, the topic: "Foreign direct investment with the objective of sustainable economic development of Vietnam" was selected for research.. In order to achieve the expectation

INTRODUCTION

1 Necessity of the research topic

In the process of opening up, integrating and attracting FDI, besides the

positive effects, FDI has shown many limitations and has not reached to the

targets and expectations, not fully meeting the Vietnam’ s objectives of

sustainable economic development: the flow of investment from developed

countries to Vietnam is restriction; FDI mainly focuses on labor-intensive

industries, uses many resources, takes advantage of industrial protection

policies; many projects are not high, technology transfer is mainly medium and

backward; The spillover effect is unclear, not supporting the development of

supporting industries; low disbursement rate; the average income of laborers is

low; the demand for housing and cultural life in labor intensive areas has not

been met; Many FDI enterprises have the status of transferring prices, false

profits, interest actually distort the transactions in the economy and cause

budget losses

In recent years, there have been many FDI’s low quality projects, which

pollute the environment, negatively affect the people's life in the investment area,

the target of sustainable economic development of the locality and Vietnam such

as Vedan Dong Nai, Tung Kuang Hai Duong, Bauxite Tay Nguyen (Nhan Co -

Tan Rai), Vinh Tan Binh Thuan Thermal Power Especially Formusa Ha Tinh,

although only in sanitation, however, the environmental disaster in the four central

provinces of Ha Tinh, Quang Binh, Quang Tri and Thua Thien Hue Estimated

damage to billions of dollars, severe economic, social and environmental impact

of the four localities and the lives of millions

The cause of the situation of FDI is not linked to the objective of

sustainable economic development primarily due to socio-economic difficulties

in the process of opening up, integrating, attracting FDI, limited awareness of

multidimensional impact of FDI in international economic integration ., give

prominence to quantity, light quality, high achievements in attracting, licensing

and deploying FDI’s projects lasting many years; the unhealthy competition of

many localities, breaking the planning, not ensuring the common interests and

objectives of sustainable economic development In addition, there is a lack of

comprehensive and synchronous master plan for this economic sector, lack of

2

mechanisms and measures for orientation, regulation, screening and effective control, linked to development objectives Sustainable economy while the objective of foreign investors is to maximize profits

In the condition that Vietnam is a low middle-income country; To implement the roadmap for joining the AEC, the Vietnam-EU free trade agreement, the CPTPP ; The economic, financial and political situation in the region and the world is often unstable and unpredictable; the perception and evaluation criteria of the international community on the level of development

of each country changes; the scarce capital and the competition of countries in the region are fierce to ensure that FDI is a part, an important resource contributing to the objective of sustainable economic development of Vietnam,

to prevent and mitigate the negative impacts of sustainable economic development in the future, to set the requirements for study and evaluation of the situation of attracting, managing and contributing to this economic sector to adjust the policy accordingly For that reason, the topic: "Foreign direct investment with the objective of sustainable economic development of Vietnam" was selected for research

2 Overview of relevant research and research gaps

2.1 Overview of foreign studies

2.1.1 Studies on the objective of sustainable economic development

Studies have shown that there is a need to ensure a sustainable development of the present and the future, with appropriate and harmonious behavior in exploitation, investment, development and conservation

Sustainable economic development is needed on a global, national and corporate level to ensure long-term benefits However, the selection and pursuit

of sustainable economic development poses many difficulties, complexities, the need for drastic changes in the policy of the state, the hand of the whole society

2.1.2 Studies on the impact of foreign direct investment

The research results favor the positive role of FDI in providing capital, creating a driving force for the recipient country However, many studies suggest that the actual capital supply of FDI is low and quite expensive

In various studies, in the various cases, there are the most inexplicable conclusions about the impact of FDI on technology and output Many studies

show that there is no positive spillover effect of technology, or the benefits of

bringing technology into the home country is negligible, even without Increasing

the output of FDI enterprises reduces the output of domestic enterprises

While many studies have found a coherent causal relationship and

positive role of FDI in economic growth, there are few studies that indicate that

there is no significant positive FDI with economic growth and FDI influence

positively to the growth of receiving countries is conditional

The impact of FDI on the import / export of the recipient country depends

on the target market for which the investment is directed Depending on the

market segment it serves, FDI will not, or likely increase, the extent of

international trade of the receiving country to a varying degree In general, FDI

helps expand the trade of the recipient countries, especially export markets,

because the trend of FDI is export oriented

In addition to the conclusions about the positive impact of FDI on

employment creation, training to improve the professional level, and

improvement of the living standard of the labor force, many studies have not

found or seen very limited impacts positive from FDI

2.1.3 Studies on FDI with the objective of sustainable economic

development

Studies show that FDI often only has positive effects in less developed

countries and the early stages of industrialization; FDI itself does not really

contribute positively to the objective of sustainable economic development of

the receiving country In order to achieve the expectation that the foreign direct

investment sector contributes positively to sustainable economic development,

the receiving country must prepare and perfect the material and economic

conditions , technical, as well as related policies and legislation

2.2 Overview of research in the country

In Vietnam, many studies on FDI have been conducted However, there is

no research focused on the relationship between FDI and the objective of

sustainable economic development

2.3 Research gap

So far, according to the author's understanding, no published scientific

work has focused on FDI as an important resource contributing to sustainable

4

economic development of host country Studies on FDI are less linked to the objective of sustainable economic development In contrast, studies on sustainable economic development are less associated with FDI Therefore, the dissertation is a research that contributes to fill the gap of research that attaches FDI to the objective of sustainable economic development

3 Objectives of the study

3.1 Overall objectives

Studying and evaluating the impact and relationship between FDI and the target of sustainable economic development of Vietnam Based on the research results, the dissertation proposes a policy solution to link FDI to sustainable economic development in Vietnam by 2025 with a vision to 2035

3.2 Detail objectives

- Overview of domestic and international research projects on sustainable development, sustainable economic development, FDI with the objective of sustainable economic development

- Systemize and clarify the theoretical issues of FDI with the goal of sustainable economic development of a country

- Analyze and evaluate the status of FDI with the goal of sustainable economic development of Vietnam in 1988 - 2017

- To study the experiences of some countries on FDI with a view to sustainable economic development and lessons for Vietnam

- Proposing orientations and policy solutions to link FDI to sustainable economic development of Vietnam by 2025, vision to 2035

4 Subjects and scope of research

4.1 Research subjects

Researching FDI as an important resource contributes to achieving the goal of sustainable economic development through a number of indicators reflecting the contribution to sustainable economic development

4.2 Research scope

Study the relationship and assess the impact of FDI on Vietnam's sustainable economic development goals from 1988 to 2017, in four stages from 1988 to 1990; 1991-2000; 2001-2010; 2011-2017, in a number of aspects:

contribution of capital, technology, labor, revenue contribution, GDP growth,

import and export, market opening, economic restructuring, Vietnamese

products have competitive advantages

Study the experience of some countries on FDI with the goal of

sustainable economic development and draw lessons for Vietnam

5 Research questions

- How is FDI estimated to be associated with the goal of developing the economy?

- What are the criteria for assessing the contribution of FDI to the

development of the economy?

- How does FDI contribute to the achievement of Vietnam's sustainable

economic development goals for the period 1988 - 2017?

- What is the proportion of contributions and correlations between FDI

and other economic sectors in the economy?

- Orientations and solutions to link FDI to sustainable economic

development of Vietnam by 2025 with a vision to 2035?

6 Method and process of research

6.1 Research Methods

To perform research tasks, the dissertation uses a combination of several

research methods:

- Method of document study: To collect and study documents and

scientific works in the country and internationally related to research contents,

through searching at libraries, guidance of scientists, The accounts of the

scientific information pages provided by the Graduate School of Economics of

the National Economics University, scientific journals, journals and the

Internet to classify, compare, evaluate, clarify the research gap

- Statistical methods and data collection: exploitation and use of primary

data sources (exploiting data collected from 11,925 sample of FDI enterprises

in 2015 by the General Statistics Office) and related secondary data to topics

from the official information channels in the country and internationally such as

General Statistics Office, Ministry of Planning and Investment, General

Department of Customs, World Bank to analyze and compare the impact of

FDI compared Domestic enterprises, among different forms of FDI enterprises,

and between Vietnam's FDI and FDI of some countries in order to assess the

6

contribution of FDI to the economy and the objective of sustainable economic development of Vietnam

- Descriptive statistics method to compare the situation, contribution of FDI between phases and associated with the objective of economic development over time; Comparing the contribution of FDI to the contribution of domestic investment; the level of connectivity between FDI and the rest of the economy

- The method of analysis and comparison: based on the source of data to assess the status of FDI with the objective of sustainable economic development

of Vietnam through analysis of the contribution of FDI; Comparing the correlation between FDI and other economic sectors and between different types

of FDI enterprises through some indicators such as capital, technology, labor, budget, export and import; Comparing some indicators of FDI in Vietnam with some countries in the region at similar stages of development; Analyze some international experiences to draw lessons for Vietnam

- The method of correlation and forecasting: using some statistical analysis and forecasting software such as OLS and ARIMA to test the correlation between FDI and some economic indicators and FDI forecast to 2025, such as the relationship between FDI and GDP, total investment, import and export

6.2 Research process

Study overview

Build a set of research indicators development and analytical frameworks for Indicators for sustainable economic

FDI with the objective of sustainable economic Analyze and evaluate the

status of FDI with the objective of sustainable economic development

Determining the contribution of FDI to achieving the goals of sustainable economic

development Proposing directions and

solutions to linking FDI with the objective of sustainable economic development

Orientations and solutions have scientific basis and conditions of implementation

Identify the research gap and the framework for analyzing FDI with a view to sustainable

economic development

Step 1: Based on an overview of domestic and foreign research related

theses to define the framework for FDI analysis with a view to sustainable

economic development and research gaps

Step 2: Build the analytical framework and the set of indicators to

measure the contribution of FDI to the objective of sustainable economic

development

Step 3: Evaluate the real situation of FDI with the objective of sustainable

economic development of Vietnam over time through correlation with other

economic sectors, compare with the set of indicators and experience of some

countries

Step 4: Analyze opportunities, challenges, issues to propose some

solutions and proposals to increase the contribution of FDI to the goal of

sustainable economic development

7 New contributions of the dissertation

7.1 New contributions in term of education and theory

The dissertation builds the theoretical framework for FDI with the

objective of sustainable economic development and applies to the Vietnam’s

condition; To summarize and study in depth the international experience

comparing the current situation in Vietnam for FDI with objectives of

sustainable economic development through the periods:

( 1 ) The impact of FDI on the objective of sustainable economic

development is conditional, depending on the level of economic development,

availability of infrastructure, human resources - especially highly quality human

resources, institution and regulatory policy instruments, effective FDI

management Besides the positive effects, FDI potential risk of unsustainable

for the Host Country Economic

( 2 ) Through study experience in some countries; Actual contribution of

FDI to Vietnam’s economic development objective in the period 1995-2017,

the dissertation assesses through indicator system, including: contribution ratio

in total investment; share of GDP; efficient use of capital; type of enterprise;

quality of the transfer technology; proportion of imports and exports shows that

FDI in Vietnam does not fully meet the objective of sustainable economic

development

8

( 3 ) Using OLS methodology, the model assessing the impact of FDI on GDP, domestic investment and export of Vietnam in the period 1995-2017 The result show that: consider in correlation multivariate relative, effect FDI to GDP through exports; FDI has positive correlation with GDP, domestic investment and export when considering separately correlated with each indicator; comparring with some of the proposed indicators of the dissertation indicates that although FDI has not reached the expectation of Vietnam's objective of sustainable economic development, but still plays an important role for the economy

( 4 ) The dissertation also shows that the quality of FDI in recent years has significantly improved, but has not reached the proposed sustainable level according to international experience, such as not stabilizing the major balances

of the economy, maintaining and developing sustainably the factors such as capital, labor, technology, resources, increased productivity, efficiency in using resources, or increasing contribution of the TFP; transferring effectively model and structure economic, enhancing quality, competitiveness, sustainability of the products, promoting participation, penetration into the global value chain, high value added; as well as the spillover effects of FDI on the rest of the economy…

7.2 New findings and recommendations taken from the research and investigation of the doctoral dissertation

The dissertation affirmed that FDI is an important part of the economy, contributing to the country’s reform and development in the period 1988-2017 However, the overall assessment in comparison with some countries, as well as the comparison between the contribution of economic sectors, FDI is not really sustainable, contributing not corresponding to potential, not meet the goal of sustainable economic development In order to ensure that FDI is linked to the goal of sustainable economic development, Vietnam should be ready for certain conditions

The dissertation proposes some solutions to link FDI to Vietnam's sustainable economic development goals by 2025, vision 2035: (1) To construct and deploy as soon as possible the new generation FDI strategy; (2) To amend, supplement and perfect the system of legal documents; (3) To amend, supplement, finalize and publicize the plan with scientific and practical basis;

(4) To focus on infrastructure development of special economic zones, regions

and localities with comparative advantage to facilitate effective FDI; (5)

Continue reforming administrative procedures , improving state management

efficiency; (6) To attach importance to investment in the development of

high-quality human resources; (7) To renovate modes, raise the high-quality and

efficiency of advocacy and investment promotion, and promote the role of

associations and organizations providing FDI support service, select carefully

high quality FDI

The dissertation is a scientific basis for evaluating FDI with the objective

of sustainable economic development of Vietnam and other countries with

similar conditions, which is the scientific basis to help managers understand the

orientation and formulate strategies, complete the policy to link FDI to

Vietnam’s objective of sustainable economic development by 2025, vision to

2035 The proposed indicators are the basis for the assessment of the success of

the policy and the practice of FDI with the goal of sustainable economic

development in each period, poses the requirements to continue research to

complete the indicators in the next study

8 Structure of dissertation

In addition to the Introduction, Conclusion, List of Abbreviations, List of

Tables, Figures, Reference Lists and Annexes, the dissertation is presented in

three chapters:

Chapter 1: Theory of Foreign Direct Investment with the objective of

Sustainable Economic Development and International Experience

Chapter 2: The Situation of Foreign Direct Investment with the Vietnam’s

objective of Sustainable Economic Development, 1988-2017

Chapter 3: Orientations and solutions to link foreign direct investment

with the Vietnam’s objective of sustainable economic development up to 2025,

vision 2035

10

CHAPTER 1 THEORY FOR FOREIGN DIRECT INVESTMENT WITH THE OBJECTIVE OF SUSTAINABLE ECONOMIC DEVELOPMENT

AND INTERNATIONAL EXPERIENCE

In this chapter, the author concentrates on clarifying the theory of FDI as

an important resource for achieving the objective of sustainable economic development; study international experience and propose some indicators to assess the economic sustainability of FDI

1.1 Theory of foreign direct investment

1.1.1 The concept of foreign direct investment

Can be generalized, FDI is the investment of individuals, companies (mostly transnational and multinational companies) to build overseas branches and subsidiaries and to own all or a whole each part of that base This is an investment in which a foreign investor contributes a sufficient amount of capital

to produce or provide services and allows them to directly participate in the management and administration of investment objects The goal is to gain higher profits through the implementation of overseas business operations

1.1.2 The causes and main forms of FDI

FDI is an indispensable trend in international integration and trade and is carried out in various forms, depending on the orientation of the receiving country and the choice of the investor

Some main forms of investment: joint venture enterprises; 100% foreign invested enterprises; BOT, BTO and BT contracts; Business Cooperation Contract; parent company - child

1.2 Theory of the goal of sustainable economic development

1.2.1 Economic growth and development

Economic growth can be understood as the increase in the production of goods and services, or the increase in the size of the economy over a given period of time, which is often reflected in the percentage increase of the gross domestic product (GDP) after the adjustment of inflation, or the actual increase

in per capita income

Economic development is the process of growing up, advancing all

aspects of the economy It includes both economic growth in terms of quantity

and quality, and structural integrity; Renovation of economic institutions in line

with the development stage; The quality of human life is raised both physically

and mentally and towards a healthy living environment

Economic growth is the basis, the basic condition for economic

development In contrast, economic development encompasses both economic

progress and social progress, creating a solid socio-economic base to achieve

future economic growth

1.2.2 Sustainable development and sustainable economic development

Sustainable development is a way of socio-economic development in

order to better address the relationship between economic growth, social issues

and environmental protection with the aim of better meeting the needs of the

present generation and not hinders the fulfillment of the needs of future

generations In other words, it is a harmonious development in terms of

economy, culture, society and the environment in all generations in order to

continuously improve the quality of human life

Sustainable economic development is a state of development of an

economy in the direction of reducing the value of low added value to high

added value in accordance with natural and social conditions of the country,

towards the structure of information economy, knowledge economy structure;

To exploit effectively and bring into full play the comparative advantages and

competitive advantages of the domains and professions where the country has

advantages Sustainable economic development also ensures that the economy

does not fall into foreign debt and that the balance of payments is not

over-deficit causing macro-economic instability Sustainable economic development

in the context of international integration is also reflected in the competitiveness

of the economy in general as well as each business, each product in particular

1.2.3 The goal of sustainable economic development

The goal of sustainable economic development is a sustainable goal that

needs to be achieved for economic development over a given period of time,

usually five years, ten years, sometimes even 15 years, or even 20 years, even

longer; is a set of indicators related to the future economic development of an

economic entity The goal of sustainable economic development is often

12

accompanied by a strategy of economic development in a certain period and realized, implemented through specific programs and plans

1.3 Contribution of FDI to sustainable economic growth

FDI contributes to the goal of sustainable economic development that foreign investors deploy and operate investment projects that meet the requirements of the objective of sustainable economic development of the recipient country voluntarily or as required by the policy instruments of the receiving country The review and assessment of FDI attached to the objective

of sustainable economic development can be made through the impact assessment, the contribution of FDI to the achievement of objectives, stabilization of major balances of the economy; To ensure the sustainable development of such factors as capital, labor, technology, natural resources ; increased productivity, efficient use of resources, or increased contribution of productivity to aggregate factors; the transformation of the model, the economic structure in an efficient manner, the improvement of the quality, competitiveness, sustainability of the product, the promotion of participation, penetration into the global value chain, high value added; as well as the spillover effects of FDI on the rest of the economy

1.4 Some criteria assess the impact of FDI on the target of sustainable economic development of receiving countries

1.4.1 Content: Sustainable investment partner; technological sustainability; Sustainable in form of investment; Sustainable in the field, industry, investment products; Sustainability in regional, local and product linkages; Sustainable in some key indicators

1.4.2 Some specific indicators: Through the study of some countries' experiences and FDI practices in Vietnam from 1988 to 2016, a number of reference indicators assessing the linking of FDI with the objective of sustainable economic development are discussed Summary: KFDI <20% of total social investment; Joint ventures account for over 50% of KFDI; 100% foreign invested enterprises <50% KFDI; %GDPFDI>% KFDI; ICORFDI <3.5; modern technology transfer quality, suitable

1.5 A number of international experiences on FDI aiming at sustainable economic development

The experience of South Korea, Malaysia and China shows that preferential policies and investment support instruments need to be used to

target target investors and move towards priority areas, with the first To attach

importance to the joint venture in order to study and raise the endogenous

capacity and promote the economic restructuring along the direction of

sustainability; The case of FDI expansion, at all costs, ineffective; FDI policy is

unclear and transparent; the inadequacies of law enforcement and the

unreasonableness of some preferential policies lead to undesirable results

which directly threaten the goal of sustainable economic development

1.6 Some conditions linking FDI to the objective of sustainable

economic development of host countries:Having policies to support investors

effectively reduce costs and ensure profitable business in case investors choose

Choose a sustainable investment plan In addition, it is necessary to set up a

management, monitoring and enforcement mechanism to ensure that investors

invest in sustainable development, as well as to prevent acts of non-observance

of state regulations, Investors deploying quality non-quality projects in

localities In addition, it is necessary to enhance the role and effectiveness of

communication, investment promotion, the operation of associations and

investment support organizations:

- Having a clear and transparent legal system and ensuring the orientation

of sustainable economic development for FDI

- To publicize and ensure the implementation of sustainable economic

development strategies in line with specific characteristics and competitive

advantages of each economy, region, locality, industry and product

- To develop an integrated and synchronous infrastructure system to ensure

that investors operate effectively when choosing sustainable investment plans

- Improving the efficiency and effectiveness of state management, while

ensuring that investors effectively implement the project while timely solving

difficulties, obstacles arise, creating confidence as well as self-consciousness in

ensuring sustainable investment

- Ensurring quality as well as availability of resources to meet the

requirements of investors, especially high quality human resources

- To renovate modes, raise the quality and efficiency of the work of

mobilization and investment promotion, promote the role of bridges of

associations and investment support service organizations, pepper, attaching

importance to investment quality instead of quantity

14

CHAPTER 2 THE SITUATION OF FDI WITH VIETNAM'S SUSTAINABLE

ECONOMIC DEVELOPMENT, 1988-2017

In chapter 2, the author concentrates on analyzing and evaluating the situation of FDI in Vietnam, the results achieved and limited limitations in linking FDI to Vietnam's economic development goals as well as in the correlation Compared with other sectors of the economy to draw practical lessons

2.1 The objective of sustainable economic development of Vietnam

Sustainable economic development targets are set only when the economy reaches a certain level of development Together with the process of innovation, building and developing the socialist-oriented market economy, developing and implementing socio-economic development strategies in each period, the objective of sustainable economic development of Viet Nam is gradually being shaped and concretized through the evaluation criteria The objectives set out in the socio-economic development strategy for the period 1991-2000 focused on poverty reduction, out of crisis, economic stabilization Sustainable economic development has not been set up; In the period 2001-2010, the sustainability aspects were set However, at this stage, the main goal

is to strive out of underdevelopment and to lay the foundations for the next phase; Vietnam's sustainable economic development goals are formally reflected in the Vietnam Sustainable Development Strategy for 2011-2020 However, indicators such as ICOR, TFP, CPI, Government debt lack specific quantitative measures The goal of Vietnam's sustainable economic development continues to be reflected in the Vietnam Report 2035, which seeks to a prosperous, creative, equitable and democratic Vietnam by 2035

2.2 FDI in Vietnam, period 1988-2017

As of 20/12/2017, the country has 24,748 active FDI projects, from 125 countries and territories, with a total registered capital of nearly $ 319 billion (including capital increase) FDI has been present in 63/63 provinces and cities of Vietnam; invest in 19/21 branches in the national economic classification system FDI has always been a dynamic development area and played an active role in the process of international economic integration and development in Vietnam

FDI contributes significantly to the achievement of Vietnam's

socio-economic development objectives and strategies in each period, accounting for

a significant proportion of GDP, leading to exports, as well as contributing

positively to the budget , create jobs and stable income for employees From an

average of 6.3% of GDP in the period 1991-1995, FDI increased to 10.3% of

GDP in the five years 1996-2000 In the period of 2001-2005, the average

proportion was 14.6% In the period of 2006 - 2010, FDI contributed over 17%

of GDP This figure for the period 2011-2015 is 17.14% GDP, of which, in

2015, this sector contributes approximately 18.07% of GDP This is a significant

contribution to the Vietnamese economy given Vietnam's low middle-income

status However, with an investment of 22.6% of the total social investment in

2011-2015, only contributing to 17.14% of GDP shows a lack of sustainability and

no technological advantage , market, management skills of FDI

2.3 The impact of FDI on sustainable economic development of Vietnam

2.3.1 These achievements

Firstly, FDI contributes significantly to the growth and development of

the economy, contributing to the GDP increasing year by year

Secondly, FDI is an important source of additional capital for the

development of the whole society and economic growth of the country

Thirdly, increasing export turnover, contributing to expanding

international markets alongside traditional markets, changing export structure

towards increasing the proportion of processed products; contributing

significantly to the expansion of external relations, active and active economic

integration with the region and the world of Vietnam

Fourth, FDI has a positive impact, promoting the restructuring of sectors

in the economy as well as the structure of each branch in the direction of

industrialization and modernization

Fifth, FDI contributes to promoting the transfer of technology in terms of

machinery, equipment, knowledge and management experience, which in turn

has a bearing on improving the technological level in the country

Sixth, the spillover effects of FDI on other economic sectors in the

economy

16

Seventh, FDI contributes significantly in creating jobs for workers

Eighth, FDI contributes to building, consolidating and perfecting the system of policies and laws on economics, raising the quality of the contingent

of cadres and civil servants, ensuring the construction and development of a market economy socialist orientation

2.3.2 Limitations

Firstly, the contribution of FDI to the Vietnamese economy reveals many unstable factors which have not shown the expected positive role In addition, with a significant proportion of capital and investment, while FDI is dominated

by 100% foreign-invested enterprises, there are high risks

Secondly, it is not sustainable in the orientation and selection of investment partners

Thirdly, not sustainable in the import and export structure

Fourth, the goal of attracting technology (high technology, source technology), technology transfer for FDI has not reached the requirements

Fifth, the spillover effects of FDI on other sectors of the economy are limited

Sixth, most projects in FDI quality are not high, average project size is small, disbursement rate is lower than required

Seventh, the living standard of workers in FDI is not high, and strikes and strikes tend to increase

A number of FDI enterprises have applied sophisticated transfer pricing techniques, resulting in false losses, real interest, and budget losses, leaving most Vietnamese parties to withdraw from joint ventures 100% foreign capital

2.3.3 Causes of the results and limitations

2.3.3.1 Causes of the results

- First of all, it is the policy of reform, opening up, attracting and managing FDI

- Vietnam has step by step improved the legal system and market economy institutions, reformed administrative procedures, improved the quality

of the contingent of cadres and civil servants, built, perfected and committed to implementing standards Regulate the economy with the international community

- Vietnam maintains stable politics, national defense and security, which

is considered a safe investment area

- The direction and management of the Government, the ministries,

branches and local administrations are more active

- Investment promotion activities have been improved

2.3.3.2 Causes of the limitations

Firstly, the legal system and policies on investment, though amended and

supplemented, have not yet been uniform and inconsistent; The conditions to

ensure the linkage and efficient operation of the FDI sector such as

infrastructure, human resources, the development of domestic economic sectors,

supporting industries and intermediary services have not met The demand leads

to low capital absorption, reduced efficiency and contribution of the FDI sector

Secondly, planning is not good, lack of a master plan, an effective strategy, a

long-term vision for the economy in general and the FDI sector in particular

Thirdly, the ineffectiveness of policy tools in selection and management

of FDI leads to the existence of many poor quality projects that waste resources

and environmental pollution, not to mention most of the projects are models

Enterprises with 100% foreign capital, many joint ventures also transformed into

100% foreign capital This has led to problems of manipulation, market

manipulation, transfer of prices, tax evasion, failure of access to, learning and

Master the technology transfer, improve the capacity of Vietnamese enterprises

Fourth, there are some shortcomings in the decentralization of investment

management The decentralization of management is right, however,

decentralization does not take into account the management capacity of each

locality, the management characteristics of each branch; The lack of

mechanisms for coordination, inspection, supervision, lack of sanctions for

violations related to decentralization

Fifth, the promotion of investment is not really suitable, effective is not

high The overall management and coordination of investment promotion

activities of the whole country has not been properly paid attention

Sixth, lack of coordination between ministries, departments, localities

The organizational structure, staffing and administrative procedure reform have

not met the objective of sustainable economic development

In addition, the activities of the associations and support service organizations

are still formal, not promoting the role of bridges between the state and enterprises,

as well as the provision of investment support services effective

18

CHAPTER 3 ORIENTATIONS AND SOLUTIONS TO LINK FOREIGN DIRECT INVESTMENT WITH VIETNAM'S OBJECTIVE OF SUSTAINABLE ECONOMIC DEVELOPMENT UP TO 2025, VISION 2035

In chapter 3, the author analyzes the opportunities, challenges and forecasts for FDI prospects in Vietnam in the coming years Based on the proposal of FDI orientation in the coming time, the author proposes some solutions to ensure FDI associated with the goal of sustainable economic development of Vietnam until 2025

3.1 Opportunities, challenges and prospects for FDI into Vietnam

3.1.1 FDI’s opportunities in Vietnam

Vietnam has comparative advantages in geographical location, natural conditions, availability of resources for development investment, economic and political stability

Vietnam has signed many trade and investment agreements, including new generation agreements such as TPP, CPTPP and EVFTA Vietnam is rich in natural resources, including land, minerals, forest resources, marine resources Vietnam has a plentiful human resource, which is in the period of golden population, industrious and creative in nature, able to adapt quickly to new technologies, especially relatively cheap labor Comparatively, foreign investors are very interested

Vietnam is considered one of the countries with the most stable political situation in the context of the situation in the world and the region has many instabilities in the past years, as well as the success in investment in production and business High-tech FDI enterprises in Vietnam will be important incentives for corporations, transnational corporations and investors to invest, expand investment projects, transfer technology transfer, investment in research and development in Vietnam in the future, will contribute to increase the sustainability of the FDI sector

Over time, Vietnam has timely issued, amended, supplemented and amended the Law on Investment, the Law on Enterprises and the system of laws and regulations relating to investment increasingly consistent and

consistent with international; To continue improving the market mechanism,

reforming administrative procedures, financial and banking systems; overcome

weaknesses in infrastructure, develop supporting industries; The importance of

improving the quality of the cadre and civil servants in the investment sector has

contributed to the improvement of the quality of Vietnam's investment

environment and business, and to promoting the efficiency and competitiveness of

the economy This is a great opportunity for investment in the FDI sector and it is

receiving more and more attention from investors from developed economies

3.1.2 Challenges of FDI in Vietnam

Firstly, the challenge of tightness, transparency, uniformity of the law

Secondly, the challenge in regulating the rational investment structure for

FDI is lacking and weak in the direction and regulatory tools of Vietnam

Thirdly, the lack of infrastructure and the lack of systematic and

synchronous coordination are also a major barrier to directing high-quality FDI

flows into Vietnam

Fourth, challenges in the management and administration of the State

Fifth, the challenge of human resources

Sixth, the challenge in competition, improve the efficiency of FDI with

other countries

Seventh, the risk of FDI sector receiving and consuming low technology

from other countries

Eighth, the risk of losing market share and losing market

Ninth, Challenges in advocacy and investment promotion

3.1.3 Vietnam's FDI prospects to 2025 with a vision to 2035

Prospects for development of Vietnam's foreign direct investment sector

in the coming time, with objectives and orientations serving the cause of

national industrialization and modernization, renewal of the growth model ,

economic restructuring , aiming at sustainable economic development, in the

context of the world economy and the region still in difficult situation, facing

many challenges However, based on the achievements of the sector in recent

years and the efforts and close co-operation of the Government, levels and

sectors in recent times, Vietnam still has the prospect of expanding, developing,

20

improving the quality, efficiency and ability of the FDI sector to integrate with the goal of sustainable economic development

3.2 Orientation to attract FDI to 2025

Orientations for the development of the sector with foreign direct investment in the coming time must be oriented towards the selection and improvement of quality, contributing to the economic restructuring process and the renewal of the growth model depth; focus on quality, efficiency and sustainability; To shift the labor structure towards increasing the percentage of technically skilled laborers; transfer and apply advanced science and technology, technical process and management skills suitable to each specialized branch or project; To attach importance to attracting a number of key sectors and Vietnam's strengths, such as tourism, agriculture, aquaculture, sea transport, precision engineering, electronics, information technology and high technology The experience of Korea, Malaysia, minimizing the

follow-up of product structure and model of FDI development of China, to reduce the competitive pressure as well as avoid the risk of receiving technology backward from the country

3.3 The solution to FDI with the goal of sustainable economic development of Vietnam until 2025

An economy that is open, transparent and efficient, with a stable economic, political and social base, and a well-developed economic and technical infrastructure, with the availability of resources, Improved policies, laws and regulatory tools, management, with effective FDI orientation and strategy will create an attractive and effective investment environment while ensuring FDI to meet the target a sustainable economic development of a country

3.3.1 Develop and implement the next generation FDI strategy in line with Vietnam's orientation, strategy and objective for sustainable economic development

3.3.2 Continue reviewing, revising, supplementing and perfecting the system of legal documents in line with the orientation and strategy for sustainable economic development of Vietnam and the new generation of FDI strategies