The New Nation - Internet Edition

AFP, Hanoi

Foreign investors promised 64 billion dollars to Vietnam in 2008, more than three times the 20.3 billion dollars pledged last year, the government said yesterday.

The flow of foreign direct investments (FDI) in Vietnam, a member of the World Trade Organisation since 2007, has increased steadily over the past few years.

In 2008, the amount of actually disbursed capital soared to 11.5 billion dollars, up 43.2 percent compared with 2007, said an online report from the Hanoi-based Foreign Investment Agency (FIA).

Vietnam relies heavily on FDI. The foreign-invested sector created more than 200,000 jobs in 2008 and employs 1.4 million people, according to the FIA.

But the communist country's economy, which relies on exports, has already started to feel the effects of the international economic turmoil. And experts warn that the flow of FDI could slow down in 2009.

"It is certain that we will see a decline in FDI registration next year due to the global economic crisis," Phan Huu Thang, head of the Planning and Investment Ministry's Foreign Investment Department, told the police newspaper An Ninh Thu Do this week. "Maybe we can reach 20 billion dollars (in pledged FDI), and that would already be a high result," he added. However, "so far, I have received no sign from any foreign investor asking to pull out of any project due to the crisis."

On Wednesday the Vietnamese government announced a 6.23 percent GDP increase for 2008, state television said. This figure was below the 6.5 percent official target, far below the 8.5 percent increase of 2007 and the worst performance of the Vietnamese economy since 2000.

For 2009, the authorities expect a 6.5 percent growth in GDP, but the International Monetary Fund forecasts only a five percent increase.

Out of the 64 billion dollars promised in FDI in 2008, 60.2 billion was for 1,171 new projects while the rest was increased capital for 311 existing projects, said the FIA. Malaysia became the top foreign investor in Vietnam, with 55 projects worth 14.9 billion dollars. It was followed by Taiwan, with 8.64 billion dollars, and Japan, with 7.28 billion dollars, the agency said.

Foreign investment in 2008 focused on industry and construction, including two major steel projects, one worth 9.8 billion dollars from Malaysia's Lion Industries and the other valued at 7.8 billion from Taiwan's Formosa Group.