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COVER STORY

garments. Additionally, we see growing
interest from a diverse number of investors.
LASTING ALLURE In addition to traditional investors like
those from Japan, South Korea, and Sin-
gapore, Vietnam is also seeing increased
interest among investors from China,
2023 was certainly a problematic year for most businesses in Vietnam
Europe, and the US, diversifying its sources
of FDI. Another plus is the strong focus
but the country’s outlook remains quite positive for foreign investors.
MS. VIVIE WEI on sustainability. Vietnam is actively pro-
Country Director, Dezan Shira & Associates Vietnam. moting green investments in areas like
renewable energy and sustainable infra-
structure, which are expected to attract
tremendous FDI participation connected
to the government’s master plan to shift
towards a greener economy.
Based on our observations and the
demand we see from our clients, the fol-
lowing five sectors have the potential to
attract significant FDI inflows in the
year ahead.
High-Tech Manufacturing: The global
demand for electronics, semiconductors,
and other high-tech products is expected
to remain strong, creating opportunities
for Vietnam to attract investments in
ietnam’s economic growth in 2023 economy still recorded positive growth these sectors. The Vietnamese Government
has been a mixed bag. Despite the in 2023, demonstrating resilience and is actively promoting the development of
V challenges, the economy has shown offering solid prospects for future growth. high-tech industries through targeted
resilience. The government’s timely policy Moreover, Vietnam has signed numerous policies and investments in infrastructure
interventions and the country’s strong fun- free trade agreements, including the Com- and research and development.
damentals helped mitigate the impact of prehensive and Progressive Agreement Renewable Energy: The global shift
global headwinds. The economy is expected for Trans-Pacific Partnership (CPTPP) towards renewable energy sources presents
to grow at a moderate 4.7 per cent in 2023 and the EU-Vietnam Free Trade Agree- significant opportunities for Vietnam,
and gradually accelerate in the years to ment (EUVFTA), which provide access which has abundant potential for solar,
come. However, continued vigilance is to large markets and reduce trade barriers wind, and biomass energy. The government
needed to address internal constraints and for foreign businesses. has ambitious targets for renewable energy
adapt to external fluctuations. Secondly, I would mention a competi- development and has implemented sup-
tive investment climate with favorable portive policies like feed-in tariffs to attract
APPEAL AMONG FOREIGN government policies. The Vietnamese investment. With an increasing focus on
INVESTORS Government has implemented several sustainability, the demand for clean energy
FDI inflows increased 7.7 per cent in policies to attract foreign investment, such is rapidly growing in Vietnam, creating a
the first nine months of 2023, expressing as tax incentives, land allocation support, strong domestic market for renewable
continued investor confidence in Vietnam’s and streamlined administrative proce- energy producers.
economy. The country recorded a trade dures. Infrastructure is improving grad- Digital Economy: Vietnam’s digital econ-
surplus of over $24.6 billion in the first ually, with the government making sig- omy is rapidly expanding, driven by factors
nine months, indicating strong export nificant investments in infrastructure like e-commerce, fintech, and online serv-
performance. However, domestic issues development and improving connectivity ices. The government actively supports the
like infrastructure bottlenecks, adminis- and logistics, which benefit foreign busi- development of the digital economy through
trative burdens, and labor shortages may nesses operating in Vietnam. initiatives like the National Digital Trans-
also hinder economic growth. An increasingly high-quality workforce, formation Program. In addition, Vietnam
While global economic headwinds could consisting of a young and growing popu- has a young and tech-savvy population,
pose challenges in the future, Vietnam’s lation with a strong work ethic and increas- creating a large consumer base for digital
strong foundation and proactive policies ing skill levels, makes Vietnam an attractive products and services and attracting
position it favorably to maintain its appeal destination for labor-intensive industries. investors to cater to this growing demand.
among foreign investors in the long term. Its young professionals have a strong com- Healthcare: Vietnam’s healthcare sector
Several key factors contributed to the con- mitment to learning and improving their is undergoing rapid expansion, driven by
tinued strength of FDI in Vietnam in 2023. skills and are willing to adapt to difficulties rising incomes and an aging population.
First and foremost, Vietnam offers to master any crisis. This creates significant investment oppor-
strong economic fundamentals. Finally, one should mention the increas- tunities in hospitals, medical equipment,
The government has maintained a sta- ing diversification of FDI sources. We can and pharmaceutical production. The gov-
ble macro-economic environment with see a shift to higher value investments. ernment is increasing its investment in
low inflation and a manageable public Vietnam is increasingly attracting invest- healthcare infrastructure and encouraging
debt, which despite the global economic ments in high-tech sectors like electronics, private sector participation in the sector.
uncertainties has instilled confidence in semiconductors, and renewable energy, Despite recent growth, Vietnam’s health-
foreign investors. While the economic signifying a move away from purely labor- care sector still offers significant untapped
growth rate was slower than in 2022, the intensive industries such as textiles and potential for investors seeking to partici-

18 | VIETNAM ECONOMIC TIMES | JANUARY 2024 en.vneconomy.vn