Minister Nguyen Chi Dung talks about the impact of Britain leaving the EU

The head of the Ministry of Planning and Investment affirmed that Brexit has not yet had a major impact on Vietnam, but it is necessary to continue monitoring it in the long term.

At the workshop “Investment Policy Dialogue 2016” held on the morning of June 28, Minister of Planning and Investment Nguyen Chi Dung said that the Ministry has been conducting preliminary analysis of the impact of the UK leaving the EU (Brexit) on the world and Vietnam.

Minister Nguyen Chi Dung affirmed that Brexit has not had a major impact on Vietnam, because the UK is not a partner with a large proportion of trade and investment with Vietnam. However, the Minister said that this needs to be monitored further.

Minister of Planning and Investment Nguyen Chi Dung. Photo: Investment Newspaper.

The Minister analyzed that Brexit will affect the currencies of many countries that are trading partners of Vietnam, thus indirectly affecting Vietnam.

Currently, the General Statistics Office is reviewing all investment projects that the UK invested in Vietnam, especially in the import-export sector, to assess the impact.

According to an update from the Foreign Investment Agency (Ministry of Planning and Investment), as of June 20, the number of valid investment projects of the UK in Vietnam is 266 projects, with a total investment capital of 3.584 billion USD.

The UK ranks 15th in terms of investment capital among 116 partners investing in Vietnam.

UK investors are most concentrated in the real estate business sector, with 8 projects with a total registered capital of 2.06 billion USD; the processing and manufacturing industry sector ranks second with 79 projects, with a total registered capital of 1.37 billion USD; the mining sector ranks third, with 1.3 billion USD.

According to Bao Viet Securities Joint Stock Company (BVSC), the above level of FDI investment from the UK in Vietnam is not too large, so although the Brexit event will affect the UK's investment capital flow into Vietnam, the negative level is not too serious.

At the workshop, Minister Nguyen Chi Dung stated that foreign investors come to Vietnam not only for benefits, but also to share with Vietnamese businesses and economy.

However, Mr. Dung admitted that there are still some businesses that are not doing well, such as environmental pollution, transfer pricing, occupying too much land area, slow project implementation, many large projects have not been shared with Vietnamese businesses...

Prof. Dr. Nguyen Mai - Chairman of the Association of Foreign Invested Enterprises (VAFIE) also cited that FDI enterprises are employing 3.5 million workers in Vietnam. A few days ago, the General Director of Samsung Vietnam announced that this unit has 190 supporting enterprises from Vietnam, including 12 tier 1 suppliers.

Currently, the FDI sector contributes about 20% of total budget revenue and about 20% to Vietnam's GDP. FDI enterprises account for 72% of export turnover. According to customs data for the first 5 months of the year, although domestic enterprises still had a trade deficit of up to 6.7 billion USD, thanks to the trade surplus of the FDI sector, Vietnam had a trade surplus of 1.64 billion USD.

According to the Foreign Investment Agency (Ministry of Planning and Investment), in the first 6 months of 2016, the total newly registered and increased FDI capital in Vietnam was 11.284 billion USD. It is estimated that FDI projects have disbursed 7.25 billion USD, an increase of 15.1% compared to the same period in 2015.

According to VNE