The role of FDI in Vietnam's economic development

Abstract

Since Vietnam joined the World Trade Organization (WTO) in 2007, foreign direct investment (FDI) into Vietnam has increased sharply and has become one of the important sources of capital for the economic development of the country. However, apart from the positive aspects that FDI brought, there were also many negative aspects affecting the economic, political, social, and environmental fields. By analyzing the current situation, role, and limitations of FDI in Vietnam's economic development, the study shows that FDI inflows into Vietnam had positive changes in the period 2010 - 2020. During the research, the analytical data was collected from secondary data from the yearbook of the General Statistics Office and the reports of the Foreign Investment Department - Ministry of Planning and Investment, using the descriptive statistics, synthesis, and analysis to analyze data to describe the effects and qualitative relationship between FDI and economic development in Vietnam. The research results show that in the period 2010-2020, FDI capital continuously increased in total registered capital and realized capital; the proportion of FDI contribution to GDP also increased gradually over the years, however, there was an imbalance between registered capital and realized capital, and the contribution of FDI to GDP was still limited. At the same time, the results also show that the capital of FDI invested in Vietnam and many economic sectors primarily stems from Asian countries while the number of investors in developed countries such as Europe and the Americas is yet inconsiderable, and FDI mainly focuses on processing and manufacturing industries. Based on the research results of the article, a number of solutions are proposed to help Vietnam attract more foreign-invested projects, contributing to promoting Vietnam's economic development in the coming time.