FDI disbursement hits new monthly record

17:18' 04/05/2008 (GMT+7)
A Tatung Viet Nam Company worker installs refrigerator parts. FDI disbursement reached more than $1.4 billion in April.
VietNamNet Bridge - Foreign investment disbursed in April reached more than US$1.4 billion, the highest amount ever in a single month, according to the Ministry of Planning and Investment’s Foreign Investment Agency (FIA).
Disbursement of foreign direct investment (FDI) refers to actual capital investment made following an earlier commitment by foreign investors in the form of registering for an investment licence.
Disbursement, therefore, is a more accurate measure of the real impact of FDI on the economy than gross FDI totals based on registration of projects.
Disbursement follows all licensing procedures and approvals and reflects actual capital expenditures and commencement of business operations.
For instance, $8 billion was disbursed out of a total registered FDI of $21.3 billion last year, according to the FIA. There were now 8,600 foreign-invested projects pending or in progress nationwide, with $85 billion in registered capital, of which only $30 billion has been disbursed.
South Korea’s Halla Energy & Environment became the latest major foreign investor to disburse capital on Tuesday, breaking ground on a factory for producing heavy industrial equipment in the My Xuan B1 Industrial Park in the southern province of Ba Ria-Vung Tau.
"Having received an investment licence in January, we have now been able to begin construction of the facility from which products should hit the market by the end of this year. It’s unexpectedly fast," said Vina Halla general director Ho Yong Shon.

Le Minh Chau, director of the Ba Ria-Vung Tau industrial zones management board, said the province’s FDI disbursement rates, the ratio of disbursed capital over registered capital, had reached 45 per cent.

"Most foreign-invested pro-jects in the province are implemented on schedule," Chau said.

Dong Nai Department of Planning and Investment director Bo Ngoc Thu boasted that the province’s FDI disbursement rates had reached about 57 per cent.

In the southern province of Dong Nai, two real estate projects covering sites of 366ha and 305ha, had investment licences issued last Friday and saw construction begin only five days later, said Thu.

"We are fully aware of the importance of preparing sites for investors. Most foreign-invested projects in industrial zones can disburse capital as soon as investors receive investment licences," said Foreign Investment Agency director Phan Huu Thang.

Thang said authorities were making great efforts to reduce the lapse between registration and disbursement of capital. Disbursement currently lagged considerably behind registration, he said.

"Our goal is to have disbursement reach up to 50 per cent of last year’s registered capital, with a target to reach disbursement of about $10 billion this year," he said. "But a higher figure could be reached if all localities deal effectively with site clearance."

Dong Nai, besides building resettlement areas, has piloted farmers joining their capital with companies in the form of contributing their land to projects such as the $750 million Dong Nai Waterfront City and $305 million Aqua City.

"Farmers will enjoy direct benefits from their capital contributions, while avoiding disruption to their livelihoods," said the provincial Department of Planning and Investment.

Thang also said projects that fall behind schedule without legitimate reason would have their licences revoked. This month and next, in accordance with Ministry of Planning and Investment directions, authorities would conduct a review of projects in some major cities and provinces, recommending some for revocation of investment licences.