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Key Economic Data 
  2003 2002 2001 Ranking(2003)
Millions of US $ 39,157 35,110 32,700 57
GNI per capita
 US $ 480 430 410 164
Ranking is given out of 208 nations - (data from the World Bank)

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Tran Duc Luong



Update No: 038 - (01/02/05)

Vietnam's economic development targets are putting high pressure on individual industries to diversify their capitalisation channels, which more focus on the FDI source. 
The country attracted nearly US$4.2 billion in foreign direct investment (FDI) capital in 2004, a level not reached since the Asian economic crisis stalled the economy's growth in the late 1990s. 
The figure was 34.3 per cent higher than 2003's result and well beyond the government's target of US$3.3 billion for the year. That number could rise even higher as year-end deals trickle in, as many local authorities have not provided the latest updated figures of projects approved in the last few weeks of the year. This year, Vietnam has witnessed the most obvious recovery trend in FDI inflow into Vietnam since the regional crisis. This is not an abrupt and accidental rise. The main cause lies in the country's efforts, which have been very much improved. 
The FDI rise saw parallel increases in actualised investment capital, which is expected to reach US$2.9 billion, up 8 per cent from 2003, along with increases in the number of enterprises that have applied to supplement their capital and expand their operations. The massive supplementation of investment capital by operating projects represents their increasingly efficient operations. Strong confidence in Vietnam's business environment is an evidence of the improvement. 
Japanese businesses in a survey ranked Vietnam fourth in the world in terms of competitiveness after China, the US and Thailand, while 76 per cent of Korean enterprises present in Vietnam wanted to expand their operations. 
Minister of Planning and Investment, Vo Hong Phuc forecasted that FDI inflow would continue to flourish in 2005, given the favourable conditions of the domestic and global economies. 
Internationally, FDI inflow reversed its downturn trend in 2004, reaching US$760 billion globally after dropping to US$570 billion in 2003 from US$1.27 trillion in 2001. Foreign FDI experts predicted that the upward trend would continue into 2008. In addition, economies that have recovered since 2004 are expected to build on their momentum, promising expanded markets for Vietnamese enterprises. 
Domestically, Vietnam makes many efforts to move steadily toward adapting its investment environment to international standards. 
In January, Vietnam is reported to have attracted nearly US$1 billion in FDI, kicking off a good year for flourishing FDI inflow. 
The projects include a US$656 million mobile telecommunications project, which was tabled for the government late last December and a US$115 million multi-storey complex that was given in-principle approval by Prime Minister Phan Van Khai. Many other projects are worth more than US$10 million each. 
However, the country recognises that it should encourage a substantial rise of direct investment from America and European Union investors by opening up key sectors including banking, financial services and telecommunications. The top ten foreign investors in terms of disbursed capital in Vietnam for 2004 did not include the United States or many European Unions (EU) countries, which comprise 25 strong economies. 
By the end of last year, the US ranked as the 11th largest foreign investor in Vietnam with 215 projects with a total disbursed capital of US$730 million. The United Kingdom followed with 62 projects and US$600 million in capital disbursement, with France and the Netherlands, the only two EU countries in the top 10. 
In order not to heavily rely on overseas development assistance, Vietnam is increasingly aware of the fact that it needs to attract a more significant FDI inflow from the US and EU by opening up new industries and sectors to investors. 
In an official speech of the Prime Minister Phan Van Khai in January, besides calling foreign investors to come to Vietnam, citing that they have contributed a significant role in rebuilding the country, Khai also called for greater efforts from all quarters to bolster the economic growth rate this year. 
The year 2005 will play a decisive role in realising the goals of the five-year plan (2001-2005). Therefore, the GDP growth rate of this year must be at least 8.5 per cent.
Khai ordered ministries and state agencies to seek measures to boost industries, services, agricultural products and exports and cut costs to enhance the competitiveness of Vietnamese goods. He urged his cabinet to make major changes to improve the efficiency of state administration, minimise red tape, curb corruption, prevent waste and losses in state-funded construction works. He agreed that the country needed to step up these reforms and fight against corruption, harassment and red tape to ensure transparency at state agencies and intensify supervision of their activities. 
Public complaints are mostly related to land-use right certificates, construction permits, land clearance for government's projects. Complaints piling up, waiting to be settled, just creating heavy pressures for the government. 
Khai paid much attention to preventing wastefulness and wrong allocation of state budgets as well as fighting against wrong-doers and corrupt officials. 
The government is currently very concerned about avian flu which risks to spread throughout the country quickly if there are not enough efficient measures to curb with. The disease will hit mass of rural population who live mainly on raising chickens. Lunar new year celebration (Tet) in February, the most important holiday in Vietnam is the biggest chance for farmers to sell chickens. 
Other concerns as Tet comes include widespread smuggling, counterfeit goods, food safety, price rises and increased traffic accidents. 

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