Caution is needed when selecting foreign investment projects.

Experts advising on and managing foreign direct investment (FDI) projects recommend that Vietnam needs to take measures to prevent projects with outdated technology, environmental pollution, and wasteful use of national resources.

Areas where licensing should be temporarily suspended.

Professor Nguyen Mai, Chairman of the Association of Foreign Investors, suggested that there are three areas where licensing could be temporarily suspended. Firstly, oil refining projects, as currently licensed projects have a capacity of 50-60 million tons. According to international calculations, the profit margin for petrochemical refining is only 10%, while it requires a very large land area. For example, an oil refining project with a capacity of 6-10 million tons would need thousands of hectares of land.

High investment costs and large land areas are required for these types of projects, yet they only employ 8,000 to 10,000 workers. In today's knowledge-based economy and with advancements in science and technology, attracting investment in this sector is not yet effective. Consider Samsung's project, which, with an investment of $3 billion, requires only 100 hectares of land but employs 43,500 workers with an average salary of 11 million VND per month. Such a comparison clearly highlights the advantages and disadvantages in future FDI attraction strategies.

Secondly, there's the cement production project. To date, production capacity has reached 65-70 million tons, and surplus cement has had to be exported. The problem is that producing 65-70 million tons of cement requires 100 million tons of limestone. At this rate of material consumption, Vietnam loses 1 billion tons of limestone every 10 years. No agency has yet assessed the damage caused by this resource loss. Not to mention, cement production projects are causing environmental pollution. "If you calculate carefully, including environmental costs, exporting cement isn't profitable," Professor Mai said.

The third type of project that should be halted is the iron and steel production project. Currently, Vietnam's energy supply is insufficient to meet demand, and the Vietnam Electricity Group (EVN) has to invest annually to increase electricity production by 12-13%. Meanwhile, investment in electricity production is extremely costly. With all the current steel production projects, if the costs of electricity, environment, land use, etc., are properly calculated, this sector may not necessarily benefit the economy.

Finally, there are textile and dyeing projects. According to the Foreign Investment Agency (Ministry of Planning and Investment), investment projects seeking licenses reached US$2.5 billion by 2020. These projects mainly come from South Korean and Chinese investors (including those from Taiwan and Hong Kong)... According to FDI experts, the biggest risk for textile and dyeing projects is the discharge of waste and wastewater that does not meet environmental safety standards.

Technical barriers can be used.

Discussing this issue, Mr. Dang Xuan Quang, Deputy Director of the Foreign Investment Department (Ministry of Planning and Investment), stated that Vietnam has participated in multilateral and bilateral economic partnership agreements, and therefore needs to comply with the commitments in these agreements, including commitments on transparency. This means that if Vietnam wants to restrict investment and business in a particular sector within its territory, it needs to have convincing grounds. For example, the use of technical barriers is the right of each country, but these barriers must meet the criteria of not causing discrimination or unfairness, meaning they should only apply to projects from one country and not to projects from another. Secondly, as Vietnam integrates into the global economy, it must face the reality that some FDI projects, despite its unwillingness, are still registered by investors. "In this context, the solution we can offer, while still complying with international commitments, is to build truly effective technical barriers," Mr. Quang said.

According to Mr. Quang, the criteria that can be used to build the first barrier are issues related to national security and sovereignty. Secondly, there are environmental issues; if we want to exclude projects with poor technology, we must set high environmental standards. These environmental criteria include preventing wasteful use of natural resources. For example, producing one ton of steel should only consume a certain amount of waste, raw materials, and energy; production technologies exceeding these limits are unacceptable. A third criterion could be planning, such as land use planning. Land in areas where it can be used more efficiently for clean projects should not be used for polluting projects. Alternatively, based on sectoral development plans or national planning, when the capacity and output of a production or service sector are sufficient or in excess, regulations can be established to stop further licensing.

In addition, other regulations such as food safety and hygiene, occupational safety conditions, and employee welfare may also be applied. Erecting these technical barriers will help Vietnam select good projects with advanced technology, effectively serving the national economic restructuring program.

According to baotintuc