EU investments to Vietnam start to recover

Foreign direct investment (FDI) from the European Union (EU) to Vietnam is recovering this year after a downtrend since 2011, according to a report from the Ministry of Planning and Investment's Foreign Investment Agency (FIA).

A report released this week pointed out that the EU's total investment in Vietnam in the first half of this year reached 600 million USD, nearly the same as in the entire 2013 and even higher than in the whole 2014. The FDI from the EU has had recovery after reduction from 2011 to 2014 due to recession in the global economy.

Workers of Scavi Hue Garment Company, a French wholly invested company, sewing the garment products for exports.

The total FDI was expected to be higher by the end of this year, the agency forecast.

Now, 23 EU nations have invested in Vietnam with the number of existing projects at 1,688 and total investment capital at 21 billion USD. Average investment is 12.6 million USD per project.

The biggest investors include the Netherlands, the United Kingdom (UK), France, Luxembourg and Germany, who account for 82 percent of the total FDI, according to the agency.

The EU's investment is mainly concentrated in large cities such as Hanoi and HCM City as well as provinces and cities with oil and gas resources or large industrial zones including Binh Duong, Dong Nai, Ba Ria-Vung Tau, and Da Nang, in addition to Hai Phong, Khanh Hoa and Hai Duong. Large amounts of FDI were invested in Hanoi and HCM City.

Regarding the investment sectors, the EU investors mainly put their money into the processing and manufacturing sector, with 573 projects and a total investment of 6.29 billion USD. Their other major investment sectors have included the power production and real estate sectors.

The agency said that from 1988 to 1994, the EU's investment in Vietnam was limited, but the investment increased quickly from 15 million USD in 1988 to 707 million USD in 1995. The Netherlands and France were the two largest EU investors to Vietnam during that period. They focused on the processing and manufacturing sector.

From 1997 to 1999, the EU's investment took a plunge.

Meanwhile, 2000 and 2001 saw a huge increase in the EU's investment to Vietnam and the important role of FDI from the Netherlands. The investment from the Netherlands surged by 20 percent while capital from the UK continued to rise. The EU became one of Vietnam's important foreign investors, accounting for 38 percent of the national registered FDI.

However, from 2002 to 2004, the percentage dropped to 16.8 percent due to the EU's low demand in investing abroad, the agency said.

The EU's investment in Vietnam recovered to reach 1.7 billion USD in 2005 and continuously rose to 2.3 billion USD in 2008 but then fell to about 450 million USD in 2009.

The FDI has gained a record high of 2.6 billion USD in 2010, the agency said.