Resolution No. 50-NQ / TW was issued by the Politburo on August 20, 2019, on perfecting institutions and policies and improving the quality and effectiveness of foreign investment cooperation to 2030. The Resolution will boost activities in attracting and using FDI in Vietnam correctly in the coming period, bringing greater socioeconomic efficiency and sustainability on a national level while encouraging and ensuring the interests of foreign investors.
In December 1987, the National Assembly passed the initial Law on Foreign Investment in Vietnam. This was the first product of the country’s “doi moi” (renovation) process and also the first law on the attraction and use of foreign investment capital based on the basic principles of a market economy and respect for independence, sovereignty, compliance with Vietnamese laws, equality, and mutual benefit.
At that time, the Law adjusted not only issues relating to forms and investment fields and policies on foreign investment but also establishment, organization, and management activities of foreign-invested enterprises. The 1987 Law has been continuously amended and supplemented, in 1990, 1992, 1996, and 2000, and the 2005 Law on Investment was promulgated by the National Assembly in that year.
The former and current Laws have always been the institutionalization of the Party’s innovative line and views on foreign economic relations and investment cooperation with foreign countries. The guiding principle has been consistent throughout the development and completion of the legislation to create a clearer, more favorable legal framework for investment and business, strengthening the alignment between the foreign-invested economy and the domestic economy and building a unified legal framework, in accordance with international practices and commitments made by Vietnam, and continues to be implemented on the principle of equality and mutual benefit and in accordance with each stage of socioeconomic development in Vietnam, as well as the international context and situation of foreign investment in the country.
Looking back over more than 30 years of attracting and using foreign investment, since December 1987, it can be affirmed that Vietnam has been very successful in its attraction and use. But besides the successes, the attraction and management of foreign investment still have limitations and weaknesses and new and complex problems relating to quality, efficiency, and defense - security due to the duality of foreign investment flows and the effectiveness and efficiency of State management of foreign investment being limited.
The shortcomings have been pointed out over the years but have not been overcome for many reasons, of which subjective reasons have been identified as the main causes leading to institutions and policies on foreign investment not keeping up with development requirements. If this is not completed soon, it will impact on the orientation towards attracting foreign investment, and Vietnam may be unable to attract high-quality and efficient FDI capital to implement its sustainable development strategy.
Facing unpredictable developments in the global economy and political sphere, along with its very high demand for foreign investment capital for socioeconomic development to 2030, Vietnam is well aware of the need to improve the quality and efficiency of foreign investment, addressing bad projects and investors who are not acting in good faith, removing restrictions on and weaknesses facing foreign investors, using policy levers to guide foreign investment in areas that Vietnam wants, creating added value and higher productivity, strengthening links with domestic enterprises, and ensuring foreign investment will contribute to inclusive development and sustainability in the economy, with Vietnam maintaining its economic independence and autonomy.
In this context, Resolution No. 50 from the Politburo has been issued at a time of need for innovative growth, economic restructuring, and improvements to Vietnam’s socialist-oriented market economy in the new era, as well as allowing the international community to see the consistency of Party and State policies to attract foreign investment.
Resolution No. 50 imposes very high demands on the State management apparatus over foreign investment as well as on all relevant ministries, branches and localities in finalizing institutions and policies to improve the quality and efficiency of foreign investment in the coming period. The resolution has set an overall goal of reaching the business environment and competitiveness of ASEAN group 4 before 2021 and belonging to ASEAN group 3 before 2030, with specific targets being registered capital in the 2021-2025 period of $150 to $200 billion ($30 to $40 billion each year) and $200 to $300 billion ($40 to $50 billion each year) in the 2026-2030 period, with disbursed capital in 2021-2025 standing at $100 to $150 billion ($20 to $30 billion each year) and $150 to $200 billion ($30 to $40 billion each year) in 2026-2030.
Resolution No. 50 has set out five guiding points and seven key solutions to weaknesses, including three guiding views that are particularly important compared to the previous approach: proactively attracting and selectively cooperating in foreign investment, taking quality, efficiency, technology, and environmental protection as the main evaluation criteria, and multilateralization and diversification of partners and forms of investment, ensuring national defense and security, improving the autonomy and autonomy of the economy, strengthening the Party’s leadership, and guaranteeing effective management by the government.
In the seven main tasks and solutions mentioned in Resolution No. 50, and also because of existing limitations on foreign investment, it is necessary to focus on four key tasks and solutions, including completing institutions and policies to attract investment; completing institutions and policies on investment management and supervision; improving the effectiveness and efficiency of State management of foreign investment; and strengthening Party leadership. Based on these guiding views and tasks, the main solutions in Resolution No. 50 need further research to identify specific projects corresponding to each task and solution to organize implementation so it is consistent with the directions and deadlines set forth. For the Resolution to quickly come to life requires State management agencies in charge of foreign investment and concerned ministries, branches and localities take the initiative in having a high sense of responsibility. In addition, attention should be paid to propagating and disseminating in an understandable and practical manner the content and meaning of the Resolution to the domestic and foreign business community, to employees at enterprises, and to society in general, in order to raise awareness about the position and role of foreign investment in Vietnam’s economy. This would enhance the social supervision of foreign investment activities in Vietnam, contributing to improving the quality and efficiency of foreign investment.
