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FDI in Vietnam: Towards Economic Growth for U.S. and Vietnam? My Hanh Hoang ITRN 701/Professor Malawer October 23, 2008.

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Presentation on theme: "FDI in Vietnam: Towards Economic Growth for U.S. and Vietnam? My Hanh Hoang ITRN 701/Professor Malawer October 23, 2008."— Presentation transcript:

1 FDI in Vietnam: Towards Economic Growth for U.S. and Vietnam? My Hanh Hoang ITRN 701/Professor Malawer October 23, 2008

2 Structure of Presentation Overview of Vietnam’s FDI growth Economic and FDI stances of U.S. towards Vietnam? On the issue of FDI and economic growth between U.S. and Vietnam? The future of FDI in Vietnam?

3 Important Timeline for Vietnam 1954 – Independence from France 1973 – War ended 1975 – Communist North controlled all Vietnam 1970-late 1980s – Economic slump 1986 – Doi Moi implementation 1988 – Foreign Investment Law passage

4 Flow of FDI in Vietnam, (in US$ million) CommitmentsDisbursements Source: Nguyen Nhu Binh and Jonathan Haughton paper; Ministry of Planning and Investment

5 Important Timeline: U.S. and Vietnam February 1994 – U.S. normalized political relations with Vietnam. December 10, U.S. and Vietnam signed a Bilateral Trade Agreement. June 21, Trade and Investment Framework Agreement (TIFA) was signed. December 29, Permanent Normal Trade Relations was passed. January 11, 2007 – Vietnam became WTO member

6 Presidential Candidates’ Stance on Trade/Investment with Vietnam Republican: John McCain - favor Democrat: Barack Obama – uncertain

7 Issues with FDI in Vietnam Legal barriers. Bureaucracy. Not as open to trade

8 The Ease of Doing Business in Vietnam Ease of…2009 Rank2008 RankChange in Rank Doing Business Starting a Business Dealing with Construction Permits Employing Workers Registering Property Getting Credit Protecting Investors Paying Taxes Trading Across Borders Enforcing Contracts42 0 Closing a Business124 0 World Bank Group: Doing Business 2009

9 Protecting Investors Indicator VietnamRegionOECD Disclosure Index Director Liability Index Shareholder Suits Index Investor Protection Index World Bank Group: Doing Business 2009

10 Starting a Business in Vietnam Indicator VietnamRegionOECD Procedure (number) Duration (days) Cost (% GNI per capita) Paid in Minimum Capital (% of GNI per capita) World Bank Group: Doing Business 2009

11 United States’s Disbursed FDI in Vietnam (in US$ million dollars) Total Source : Nguyen Thanh Xuan and Yuquing Xing’s paper “Foreign Direct Investment and Exports: the Experiences of Vietnam.”

12 How will U.S. invest in Vietnam in the future? Economic crisis factor Vietnam’s open-market-enough? Factor

13 Vietnam’s Country Risks Country Risk Summary (AAA=least risky, D=most risky) Sovereign riskB Currency riskB Banking sector riskCCC Political riskB Economic structure riskCCC Country riskCCC Source: Economist Intelligence Unit

14 FDI in Vietnam FDI (US$bn) Inward Direct Investment Inward direct investment (% of GDP) 3/ Inward direct investment (% of gross fixed) Net FDI Stock of inward direct investment Stock of inward direct investment per head Stock of inward direct investment (%of GDP) Source: EIU 2008

15 Conclusion Both countries benefit from FDI in Vietnam. However, the U.S.’s FDI in Vietnam will slow down due to its economic crisis and the need for additional market access and security in Vietnam. Vietnam will continue to have FDI inflow.

16 Questions?


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