The FDI “Storm” and the “Internal Strength” Equation

Over-reliance on the foreign direct investment (FDI) sector for exports is not a new issue in Vietnam, but it has consistently garnered significant attention in recent times.

Statistics show that from 2018 to 2024, exports from the FDI sector have consistently accounted for over 70% of Vietnam’s total export value. In 2024, this figure reached nearly 71.7%, a concerningly high proportion.

“Bottlenecks” from Impressive Figures

Vietnam ranks second globally in the export of smartphones and fifth in computer components, but what percentage of that value do we actually contribute?

In reality, FDI enterprises export 100% of the value of phones and components but import up to 80% of the value of these components. Where do domestic businesses stand in the global value chain?

Domestic Businesses: “Powerless to Act”?

Domestic businesses are struggling, and private sector investment remains low. This indicates a lack of “leverage” for domestic businesses to “rise up.”

What Solutions for Domestic Businesses?

To overcome this situation, Vietnam needs to:

• Create a “New Breeze” in Reform: Improve the investment and business environment, creating favorable conditions for private enterprises.
• Transparent and Supportive Mechanisms: Private enterprises don’t need monetary incentives, but rather transparent, supportive, and reliable mechanisms.
• A “New Spirit” for Domestic Businesses: Create mechanisms, policies, and a “new spirit” for the domestic business sector.
• Domestic Businesses “Strive to Rise”: Domestic businesses need to strive to rise up and assert their position in the global supply chain.
• Unity, Determination, and Aspiration: Vietnamese businesses need greater unity, determination, and aspiration.

To create “leverage” for the domestic business sector, the government should direct ministries, branches, and localities to remove bottlenecks in the business environment based on feedback from the business community.

This will be a “remedy” to help domestic businesses become “healthier” and contribute more to the country’s economic development.