A rise in foreign direct investment inflows is set to eat into Vietnam’s sizeable trade deficit. The Ministry of Planning and Investment’s Foreign Investment Agency (FIA) data indicated that disbursed foreign direct investment (FDI) capital in the country during the year’s first four months hit $3.6 billion, a 6 per cent rise year-on-year.

Vietnam ranked 12th in attracting foreign directed investment (FDI) in a recent report of A.T. Kearney. Top 10 FDI destinations in the survey belonged to newly-emerging economies with China taking the lead.

Business Week quoted the findings from A.T. Kearney showing that leaders of numerous foreign businesses gave cautious opinions about overseas investment.

A big question mark still hangs over who should have the final say in foreign invested projects. According to a draft decree, which will replace Decree 108/2006/ND-CP guiding the implementation of the Investment Law issued in 2005, the Ministry of Planning and Investment (MPI) would regain its licencing agency status for specific foreign direct investment (FDI) projects.

International donors are upbeat on Vietnam’s economic and foreign direct investment attraction potential in 2010.