Vietnamese authorities are seeking for solutions in order to attract more foreign investment in agriculture which currently accounts for only around 1% of the country’s total FDI.
Foreign investment in agriculture remains modest in Vietnam.
According to the latest statistics from the Ministry of Planning and Investment’s Foreign Investment Agency, country has so far attracted around 16,000 FDI projects, with a combined registered capital of USD237 billion. However, only 503 of them were in the agricultural sector, accounting for USD3.36 billion, or 1.41% of total FDI. In previous years this figure has been closer to 5%.
“Even though Vietnam is a major exporter of farm products, FDI in agriculture remains modest and is not on par with the sector’s potential and advantages,” said Tran Van Cong, Deputy Director of the Ministry of Agriculture and Rural Development (MARD)’s International Cooperation Department.
This decrease may be attributed to a number of reasons: high risks versus low profits, lack of incentive policies, inconsistent agricultural development policies. Experts cite all these reasons and more.
“I think that we are to blame for this situation, not our foreign partners. Infrastructure in the sector remains substandard, and there is a lack of skilled labour. There is also little cooperation between agencies, including MARD, the Ministry of Natural Resources and Environment, and the Ministry of Industry and Trade,” said economist Dr. Le Dang Doanh.
MARD seeks way to attract more FDI in agriculture
One thing experts agree on is that the solution to increasing agricultural FDI must include MARD identifying those areas of the agricultural industry that hold the most potential to attract investment, and streamlined coordination between agencies and local governments.
Whatever policy shifts are ahead, World Bank economist, Chris Jackson, gave a hint of what actual investors are looking for when he said, “Attracting foreign investment is something like a marriage. It’s not a partnership in which one side can abandon the other the moment problems arise. Investment partnerships are the same. It won’t do to simply license investors and leave them with all the difficulties of implementation. It’s necessary to work with the investor to help them deal with their problems and see their investments thrive.”
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