By Debarati Roy, MUMBAI, Bloomberg
Vietnam expects to attract US$150 billion from overseas in the next five years, as accelerating economic growth and the nation’s accession to the World Trade Organization lures investors.
Foreign investment will rise to US$14 billion this year from US$10.2 billion in 2006, deputy planning and investment minister Nguyen Bich Dat told reporters in Mumbai Thursday. The minister spoke after a meeting with Indian businessmen attended by Vietnamese Prime Minister Nguyen Tan Dung.
Vietnam’s government expects economic growth to exceed 8 percent this year, driven by the Southeast Asian nation’s accession to the WTO in January. The Ho Chi Minh City Stock Exchange’s VN Index has gained 35 percent this year, while the value of government-approved foreign-invested projects surged 64 percent through May, according to Dragon Capital, a Ho Chi Minh City-based fund manager.
Mumbai-based Essar Group said Thursday it’s considering expanding investments in shipping, telecommunications and oil and gas projects in Vietnam.
Indian companies committed to spending US$133 million in Vietnam from 1988 to 2006, according to figures from Vietnam’s Ministry of Planning and Investment. Investment pledges by Indian companies were US$158 billion in the first five months of the year, the ministry said.
The Vietnamese premier is heading to New Delhi where he will meet with Indian Prime Minister Manmohan Singh tomorrow.
“We are here to promote co-operation between the two countries and attract investments,” Prime Minister Dung told reporters after the meetings. Current trade and investment is “not commensurate with the potential of the two economies.”
India is set to become one of the top 10 countries investing in Vietnam, said Dung, without specifying a time frame.
Vietnam’s largest foreign direct investment pledges from 1998 to 2006 came from Taiwan, Singapore and South Korea, who together said they would spend US$24 billion of the total US$60 billion in the Southeast Asian country.
Trade between India and Vietnam has risen 30 percent annually since 2001, Dung added.
Exports to Vietnam from India were US$880.3 million in 2006 and US$353.9 million in the first three months of this year, according to statistics from the General Department of Customs in Hanoi. The subcontinent imported US$137.8 million worth of goods and services in 2006 from Vietnam and US$34.1 million in the first three months, the customs department said.
Tata Steel Ltd., the world’s sixth-largest steelmaker, and Vietnam Steel Corp. plan to spend US$3.5 billion on a steel-and- iron ore venture in the Southeast Asian nation to supply construction and shipping companies.
Posco in May signed an accord with Vietnam Shipbuilding Industry Group to examine the possibility of building a factory, which would be its fourth in the country. India’s Essar Steel Ltd. said in February it will link up with two state-owned Vietnamese companies for a US$527 million plant.