Be careful in choosing foreign investment projects

Foreign direct investment (FDI) project management and consulting experts recommend that Vietnam needs to take measures to prevent projects with outdated technology, environmental pollution, and waste of national resources.

Areas where licensing should be suspended

Professor Nguyen Mai, Chairman of the Foreign Investors Association, said that there are three areas where licensing can be considered temporarily suspended. The first is oil refinery projects, because currently licensed oil refinery projects have a capacity of up to 50 - 60 million tons. According to international calculations, the profit margin of petrochemical refining production is only 10%, while the land area occupied is very large. For example, an oil refinery project with a capacity of 6 - 10 million tons will require thousands of hectares of land.

High investment rate, large land area but these types of projects only use 8-10 thousand workers. Considering the current era of knowledge economy, science and technology is not effective in attracting this field. Just compare with Samsung's project, with an investment of 3 billion USD but the project only needs 100 hectares of land but has used 43,500 workers with an average salary of 11 million VND/month. When comparing like that, it is clear that there are advantages and disadvantages in orienting to attract FDI projects in the coming time.

The second is the cement production project. Up to now, the production capacity has reached 65 - 70 million tons, and the excess cement has had to be exported. The problem is that to produce 65 - 70 million tons of cement, 100 million tons of limestone are needed. At this rate of raw material consumption, every 10 years our country loses 1 billion tons of limestone. No agency has yet assessed the damage caused by this loss of resources. Not to mention, are cement production projects polluting the environment? "If you calculate carefully, including environmental costs, exporting cement is not profitable," said Professor Mai.

The third type of project that should be stopped is the steel production project. Currently, Vietnam's energy supply is not enough to meet demand, so every year the Vietnam Electricity Group (EVN) has to invest to increase electricity output by 12-13%. Meanwhile, investment capital in electricity production is extremely expensive. With all types of steel production projects today, if we calculate correctly the cost of electricity, environment, land use... this field is not necessarily beneficial to the economy.

Finally, there are textile and dyeing projects. According to the Foreign Investment Agency (Ministry of Planning and Investment), projects applying for investment licenses by 2020 have reached 2.5 billion USD. Mainly from Korean and Chinese investors (including Taiwan and Hong Kong)... According to FDI experts, the biggest risk for textile and dyeing projects is that the waste and wastewater discharged are not safe for the environment.

Technical barriers can be used.

Discussing the above issue, Mr. Dang Xuan Quang, Deputy Director of the Foreign Investment Agency (Ministry of Planning and Investment) said that Vietnam has participated in multilateral and bilateral economic partnership agreements, so it needs to comply with the commitments in those agreements, including transparency commitments. That is, if Vietnam wants to limit investment and business in a certain field in its territory, it needs to have convincing grounds. For example, the use of technical barriers is the right of each country, but those barriers must meet the criteria of not causing discrimination or unfairness, that is, only applying to projects of this country and not applying to projects of other countries. Secondly, when Vietnam integrates, it must face the reality that there are FDI projects that investors do not want but still register to invest. "In this context, the solution that we can come up with, while still complying with international commitments, is to build good technical barriers," said Mr. Quang.

According to Mr. Quang, the criteria that can be used to build the first fence are issues related to national security and sovereignty. The second is the environmental issue. If we want to eliminate projects with poor technology, we must set high environmental standards. Environmental criteria include the impact of wasting natural resources. For example, to produce a ton of steel, waste, raw materials, and energy are only at a certain quantitative level. Production technology that exceeds that limit is not accepted. The third criterion that can be used is planning, for example, land use planning. Land in areas that can be used more effectively for clean projects cannot allow polluting projects to invest. Or based on industry development planning, national planning... when the capacity and output of the production and service sectors are sufficient or surplus, it is possible to stipulate that the granting of further licenses is stopped.

In addition, other regulations can be applied such as food hygiene and safety, labor safety conditions, and worker welfare... By erecting the above technical barriers, Vietnam will be able to choose good, high-tech projects that effectively serve the national economic restructuring program.

According to baotintuc