Hanoi, Vietnam, June 27, 2020 —IFC, a member of the World Bank Group, today signed a memorandum of understanding (MoU) with the People’s Committee of Hanoi to support its efforts to attract new-generation foreign direct investment (FDI) and diversify its funding sources, thereby sustaining the city’s rapid economic development, competitiveness, and inclusive prosperity.
One of the fastest growing cities in Asia, the country’s capital accounts for one-fifth of Vietnam’s gross domestic product (GDP). Home to over eight million inhabitants, Hanoi attracted $8.45 billion in FDI in 2019, highest among the country’s 63 cities and provinces. The FDI capital flow was highest in three areas including property development, processing and manufacturing, and telecommunication and information.
To sustain robust socioeconomic development, Hanoi aims to attract higher-quality streams of FDI. This will support the city’s strategy of developing high-tech and high value-added industries, increasing local sourcing, and creating more and better jobs.
“Strategic FDI as guided in the Politburo’s resolution 50/2019 on orientations to finalize policies and mechanisms to promote FDI quality and effectiveness toward 2030 plays an essential role in sustaining Hanoi’s sustainable economic and employment growth and in realizing its industrialization and modernization plan toward 2030,” said Nguyen Duc Chung, Chairman of the People’s Committee of Hanoi. “We welcome IFC’s support in developing a new investment strategy and diversifying funding sources as well as mobilizing quality investors through its global network.”
Under the MoU framework, IFC will work with Hanoi to formulate a new-generation FDI strategy in response to the government’s master plan of foreign investment promotion toward 2030. Where possible, IFC will also assist Hanoi in diversifying its funding sources. The overall effort will leverage IFC’s global network of clients and partners, with benefits to potential key sectors including financial markets, infrastructure, logistics, and health and education.
“Hanoi already possesses many key factors that are attractive to higher quality FDI. The current environment of global supply chain changes — as a result of the COVID-19 pandemic — provides a good opportunity for the city to further prioritize FDI inflows in line with its development strategy,” said Kyle Kelhofer, IFC Regional Manager for Vietnam, Cambodia, and Lao PDR. “This includes FDI with increased local value-addition, with increased technology focus, to strengthen foreign-local firm linkages and help enhance local supply chain opportunities, foster improved job opportunities, and boost the overall competitiveness of the city.”
Promoting private sector development, IFC has been supporting Vietnam to improve business competitiveness and attract international investors over the past two decades. Most recently, IFC worked with the Ministry of Planning and Investment on recommendations for Vietnam’s new national FDI approach. It is also helping Vietnamese manufacturers improve capacity and supply to multinationals through a pilot Vietnam Supplier Development Program.
About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2019, we invested more than $19 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org .
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