Will the US become the number 1 investor?

“No. 1 investor”, “strategic investor” are phrases often mentioned when talking about the US, after the two countries signed the Bilateral Trade Agreement (BTA)  in 2000.

However, accumulated until the end of November 2015, there was just over 11.2 billion USD of investment capital from the US poured into Vietnam. Although still ranked in the top 10 countries and territories investing in Vietnam, this number is still quite modest. Vietnam has not yet been able to become a strategic investment location that American investors target.

Clear evidence, in 2014, while FDI from the US to Indonesia amounted to 2.58 billion USD, to Thailand was 1.97 billion USD, to Malaysia was 1.72 billion USD and to the Philippines was 1 billion USD, the commitment to Vietnam was less than 300 million USD. It cannot be compared with China, because at its peak in 2008, there was up to 16 billion USD of FDI capital from the US flowing into this country. Despite the recent decline, in the first quarter of 2015, the US still invested about 3.1 billion USD in China, while in the past 11 months, only more than 220 million USD was committed by American investors to invest in Vietnam.

All of the above numbers seem to go against the long-standing statements of leaders, as well as American businesses, that they will become the number 1 investor in Vietnam, even though many big American names are already present in Vietnam and every year, many American business delegations come to Vietnam to look for investment opportunities. The question that needs to be asked is why?

Many experts have tried to explain this. Professor and Doctor of Science Nguyen Mai, Chairman of the FDI Enterprises Association, has repeatedly mentioned issues related to the quality of human resources, the transparency of legal policies, the "ask - give" mechanism... as bottlenecks that prevent investment capital from the US into Vietnam.

More simply, Mr. Pham Viet Muon, former Deputy Head of the Government Office, emphasized that "the opportunity is not yet ripe".

As for the Foreign Investment Agency (Ministry of Planning and Investment), in a recent report, it mentioned reasons related to transparency and corruption, and to the still fragmented Government-business cooperation in efforts to restructure the economy; as well as limitations in infrastructure, high-quality human resources and increased costs of labor, office rental, housing...

If we look at the "opportunity", as Mr. Pham Viet Muon said, it is clear that Vietnam has a great opportunity to attract FDI from the US. Among them, the Trans-Pacific Partnership Agreement (TPP) is an extremely important push. "Vietnam's proactive participation in TPP makes Vietnam more attractive to US investors, making the Vietnamese market different from other countries in the ASEAN region that are not yet TPP members. Therefore, Vietnam may be the preferred choice of US companies headquartered in Hong Kong in moving investment outside of China," the Foreign Investment Department commented, saying that many large US corporations are planning to move most of their production facilities to Hong Kong. Vietnam, like Nike, Mast, P&G...

The American Chamber of Commerce in Singapore (AmCham Singapore) also announced that about 57% of US businesses operating in the ASEAN region rated Vietnam as the most attractive destination to expand investment.

"I believe in the statements this time from the US, that they will become the number 1 investor", Professor-Dr. Nguyen Mai said and said that, based on recent moves related to Intel and Micsosoft moving production factories to Vietnam, Harvard and Fulbright building universities in Vietnam, or the country's leaders personally "promoting investment" in the US, it is a story of the US becoming a digital investor. 1 in Vietnam will soon become a reality.

Since the TPP negotiations had positive prospects, many American investors have continuously come to Vietnam. From Exxon Mobil, Chevron... to Boeing, ADC - HAS Airport, then Microsoft, Intel, Apple, HP, or General Electric, General Atlantis, AES...

Last July, within the framework of General Secretary Nguyen Phu Trong's visit to the US, many cooperation agreements were also signed between Viejet Air and Boeing, between PVN and Murphy, between EVN and General Electric...

However, opportunities will only become reality once the internal bottlenecks in Vietnam's economy and investment and business environment are resolved. The excitement and great expectations for the Vietnam-US BTA are a valuable lesson for this story.

"We also take advantage of US investment capital from many different channels, possibly through US banks or investment funds. In addition to strong US industries such as oil and gas, aviation, energy, information technology, financial and banking services, invested by large corporations, we should also aim to connect with US small and medium-sized enterprises in manufacturing and light industries...", the Foreign Investment Department commented and said that, in addition to investment promotion investment, it is also necessary to promptly resolve problems and difficulties of American businesses in Vietnam. This is an effective way to promote on-site investment to build trust with investors.

Nguyen Duc