Record high disbursement: A positive piece of the FDI picture in Nghe An

Registration and disbursement are two sides of the investment attraction picture. Because if investors make a commitment and then leave it there, billions of dollars will only remain on paper and have no meaning for the economy.

Investment capital is a direct material factor determining the economic growth rate, which is reflected through the total social investment capital index each year and in each period. In which, capital flow from the FDI sector, together with State capital and non-State capital are the "trio" that make up the above important index.

Therefore, attracting FDI is an extremely important solution to mobilize foreign capital to promote economic growth. Last year, Nghe An continued to do this well, setting a new historical milestone with nearly 1.75 billion USD, ranking 8th out of 63 provinces and cities nationwide.

Attracting good FDI capital is very encouraging, but what is even more noteworthy is that the disbursement speed last year was equally fast.

Observing the data recently released by the Nghe An Statistics Office, it is estimated that in 2024, the realized investment capital of the FDI investment sector will reach more than VND 25,272 billion (equivalent to about USD 1 billion), 2.9 times higher than the previous year. Previously, the FDI sector disbursed nearly VND 8,624 billion in 2023, and VND 4,624.5 billion in 2022.

“Many large FDI projects were started at the end of 2023 and are being accelerated for implementation in 2024. Of which, RUNERGY PV Technology Co., Ltd. has an investment capital of 9,480.7 billion VND (accounting for 37.51% of the province's FDI capital),” said the Nghe An Statistics Office.

Looking at FDI disbursement data in Nghe An in recent years shows us many things in the picture of foreign capital flowing into the province.

Firstly, investors are basically quality businesses that "tell the truth, do the truth" so they should immediately disburse funds to build factories, workshops, and install technology to soon go into production.

Secondly, for the provincial government apparatus, the increased FDI attraction and high disbursement rate demonstrate the strictness in the appraisal and licensing process, thus attracting quality projects; at the same time, reflect the breakthroughs and efficiency in implementing administrative procedures to accompany and support investors to soon start construction and put projects into production.

Registered capital is essentially a committed number. If investors commit and then leave it there, the number is just on paper and has no meaning to the economy.

Previously, at investment promotion conferences, besides quality investors, there were also many investors who, after committing to invest thousands of billions, tens of thousands of billions of VND, never saw any implementation, raising suspicions that their presence was only to polish their names, while the locality had to bear the consequences.

Economic experts call this situation “virtual investment”. However, the consequences are not virtual for the economy, economic regulation policies and local socio-economic development plans.

Previously, there was a fairly famous corporation in the tourism sector that committed to pouring 16,000 billion VND into the implementation of an ecological resort and entertainment complex in a coastal commune of Nghi Loc district.

However, after many years, the promised 5-star beach hotels and resorts, luxury villas, international conference centers, 18-hole golf courses, eco-tourism areas, international-class entertainment areas; agricultural areas… are nowhere to be seen.

The only consequence is that for a long time, that coastal commune was in a "dilemma", delaying the progress of new rural construction, and the houses of the people in the project area could not be built or repaired because of the "virtual" population planning.

The project was supposed to promote economic development, but it turned out to be a "blood clot" causing congestion, slowing down local economic development, affecting production, and eroding people's trust.

Or the project of a sponge iron factory with a capacity of 2 million tons of products/year and a total investment of up to 1 billion USD, which was once famous, was expected to be the "iron fist" that would turn the northernmost part of Nghe An, including Hoang Mai town and Quynh Luu district, into the growth pole of the province. But after nearly 10 years on paper, in 2019, the province was forced to withdraw the license and terminate the project.

Registration and disbursement are two aspects that paint the picture of investment attraction, including the FDI sector. Only when both are done well at the same time will the results be truly sustainable and have practical meaning.

It is worth noting that in Nghe An, the FDI picture is very bright, even, and positive in both aspects. We have attracted many FDI projects with total investment capital always higher year after year; and have achieved a relatively high disbursement progress.