46 pct of multinational firms in Vietnam want to expand: WB

By Nguyen Quy September 3, 2020 | 06:12 pm PT

The LG Electronics factory in Trang Due Industrial Park in northern Hai Phong City. Photo courtesy of LG Vietnam.

Nearly half of multinational firms operating in Vietnam have expansion plans in the next three years, a World Bank report said.

The country’s 46 percent figure was higher than for Thailand (43 percent), Malaysia (40 percent), Turkey (35 percent), and China (17 percent), the report, which polled 2,400 executives working for global companies in 10 middle-income countries, found.

It was behind Nigeria (81 percent), India (64 percent), Indonesia (57 percent), and Brazil (49 percent).

In Vietnam, 45 percent said they would keep operations at the same level for the next three years, 1 percent plan to contract their operations and the rest did not have plans, the report released this week said.

Asked about the biggest obstacles to operating in Vietnam, they said investment approvals, local sourcing requirements and expatriate restrictions.

In terms of competitive pressure, 31 percent said they face pressure from other global firms operating locally, 30 percent listed foreign firms in other markets and 24 percent said Vietnamese firms.

"In Vietnam, FDI allowed more than 350,000 individuals to enter formal manufacturing employment between 2007 and 2016," the World Bank said.

Bui Ngoc Son from the Institute of World Economy and Politics said Vietnam still lacks several factors that multinational companies need such as infrastructure, logistics, low costs rents and skilled labor.

FDI has been a key driver of Vietnam’s economic growth. Foreign companies account for around 70 percent of the country’s exports. FDI rose 7.2 percent to $38 billion last year.