Developing a set of criteria to appraise, monitor and evaluate the effectiveness of foreign direct investment (FDI) projects will significantly contribute to helping localities screen out poor quality projects.
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| The lack of a common set of criteria makes it difficult to control the quality and impact of foreign investment projects. |
To avoid choosing the wrong project
Two sets of criteria, on the appraisal of foreign investment projects under the authority of the provincial People's Committee to approve investment policies (referred to as the Appraisal Criteria Set) and on the monitoring and evaluation of the effectiveness of foreign investment in the province (referred to as the Monitoring Criteria Set), were announced by the International Investment Research Institute (ISC) in collaboration with the Australian Embassy in Hanoi last weekend.
In these two sets of criteria, the Appraisal Criteria Set has 10 criteria. Of which, 8 criteria are for project screening, indicating legal regulations related to appraisal of foreign investment projects in Vietnam, including: investor's profile and legal status, investment sector, compliance with planning, ensuring national defense and security, environmental protection, ensuring financial capacity, ensuring effective land use and effective labor use, technology application and transfer.
The remaining two criteria indicate regulations on special investment incentives for high-quality foreign investment projects, investments in high-tech fields, with great spillover effects, and investment incentives according to industries and areas where investment is encouraged.
Meanwhile, the Monitoring Criteria Set includes 36 criteria, divided into many different groups of criteria. For example, criteria on capital attraction and use, criteria on economic efficiency of the foreign investment sector, or criteria on social efficiency, environmental protection, etc., specifically business efficiency, import and export, spillover effects, greenhouse gas control, energy saving, etc.
“We decided to research and publish these criteria because in recent times, although many legal documents on attracting foreign investment have been issued, including provisions on conditions and criteria for selecting foreign investment projects, they are scattered in different documents. When applied in practice, they can lead to errors and unwanted projects falling through the net,” said Mr. Phan Huu Thang, Chairman of ISC.
According to Mr. Thang, the two sets of criteria announced by ISC will help local decision-making become easier and faster; thereby promoting the investment and business environment, increasing foreign investment flows. This is more important and necessary than ever, especially after the Politburo issued Resolution 50/NQ-CP on Orientation to perfect institutions and policies to improve the quality and efficiency of foreign investment cooperation until 2030, including the requirement to "improve the quality" of foreign investment flows.
Expressing agreement on the need for criteria sets for appraisal, monitoring and evaluation of the effectiveness of foreign investment projects, an official from the Vinh Phuc Department of Planning and Investment said that the lack of a common set of criteria makes it difficult to control the quality and impact of foreign investment projects.
“The unclear and opaque appraisal process also affects the investment environment, making it difficult for foreign investors to choose investment locations,” he said, adding that from a professional perspective, the issuance of criteria will bring many benefits to investors, state management agencies and provincial leaders in making investment decisions, appraisals, and project management.
Build filters to select good projects
The announcement of two sets of criteria by ISC for appraisal, monitoring and evaluation of the effectiveness of foreign investment projects can be said to be a positive and noteworthy move. However, Mr. Nguyen Cong Thanh, Vice Chairman of the ISC Board of Members, said that these sets of criteria are only meant as “reference documents” in the process of managing and directing foreign investment cooperation activities of localities, and are not in the nature of legal documents or directive documents.
What Vietnam needs is a set of criteria that is common to the whole country and has a "legislative" nature. 
“This set of criteria will help local decision-making become easier and faster; thereby promoting the investment and business environment, increasing foreign investment flows,” Mr. Thanh said, adding that these two sets of criteria need to be widely disseminated to provinces and cities across the country.
Mr. Cosimo Thawley, Minister Counselor, Chief Representative for Southeast Asia (Australian Treasury) also said: "The two sets of foreign investment criteria proposed by ISC will be useful tools to support and contribute to improving the quality and effectiveness of foreign investment cooperation in localities in the spirit of Resolution 50-NQ/TW dated August 20, 2019 of the Politburo".
However, what Vietnam needs is a set of criteria that is common to the whole country and has a “legislative” character. At the end of 2022, a set of foreign investment project screening tools was developed and published based on the cooperation between the Vietnam Federation of Commerce and Industry (VCCI) and the United Nations Development Program (UNDP). However, in reality, this toolkit is no different from a “reference document”. A set of criteria published by the Vietnamese Government and applied nationwide is what is important.
To optimize the benefits of foreign investment capital flows, two years ago, the Ministry of Planning and Investment developed and reported to the Government two sets of criteria, one for selecting foreign investment projects and one for evaluating the effectiveness of foreign investment projects.
Accordingly, to select projects, 7 criteria have been set, including investment rate, labor, technology, technology transfer, connectivity and spillover effects, environment and national defense and security. These are all criteria that have been institutionalized in many
Meanwhile, with the set of criteria for evaluating the effectiveness of foreign investment, the Ministry of Planning and Investment proposed up to 36 indicators, including 25 economic indicators, 7 social indicators and 4 environmental indicators.
At that time, speaking to a reporter from Dau Tu Newspaper, Mr. Do Nhat Hoang, Director of the Foreign Investment Agency (Ministry of Planning and Investment) said that the research and development of criteria for evaluating the effectiveness of foreign investment was "urgent" when Vietnam was shifting to a foreign investment cooperation policy, focusing on factors such as quality, efficiency, technology and environmental protection. However, up to now, the set of criteria has not been officially approved.
According to information from the Foreign Investment Agency, this agency is finalizing this set of criteria to submit to the Government for approval. At that time, Vietnam will have an official “filter” to select good projects and to evaluate the effectiveness of foreign investment.
Source: https://baodautu.vn/khong-de-lot-luoi-du-an-fdi-xau-d216063.html
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