Vietnam Sees Record-High Foreign Investment on TPP, Eased Rules

Vietnam expects disbursed foreign direct investment to reach a record high this year after the government eased business regulations, luring investors seeking to benefit from the Trans-Pacific Partnership trade pact.

Disbursed foreign direct investment in 2015 should be about $14 billion, $1.5 billion more than last year, Planning and Investment Minister Bui Quang Vinh said in an interview while attending a conference in Hanoi on Saturday. Pledged foreign investment is forecast to increase over last year’s $21.9 billion.

“Our improving investment environment and trade agreements help attract more companies to move from China and other regional countries to Vietnam,” Vinh said.


The surge in the Southeast Asian country’s foreign investments comes as neighboring countries such as the Philippines report declines, reflecting overseas investors’ increasing attraction to Vietnam. The country stands to be the biggest winner of the 12-nation TPP accord, which will boost exports with tariff reductions on a range of products, including shoes, seafood and clothes, according to the World Bank.

“Sticky capital inflows through FDI is very important for Vietnam as it tries to import more goods to industrialize,” said Trinh Nguyen, a Hong-Kong based senior economist for emerging Asia at Natixis SA. “This is a much more stable way to access funding for investment, which Vietnam needs at this level of development.”

Vietnam is forecast to post the strongest economic growth this year of six major Southeast Asian countries, according to the Asian Development Bank. The country’s growth is expected to accelerate through the second half, underpinned by rising private consumption, export-oriented manufacturing and FDI, the ADB said. The TPP could boost Vietnam’s gross domestic product by about 8 percent and boost exports by 17 percent over the next 20 years, the World Bank said in a report last week.

Source: Bloomberg