Workshop: Sustainable Agricultural Investment of Vietnamese Businesses in the Mekong Sub-region
With the coming of “Doi moi” (Renovation) in 1986, Vietnam not only opened its market for foreign investors, but also started investment overseas to find new markets and partners. From the first overseas investment in 1989 up through 2015, Vietnam has invested over 20.8 billion USD overseas through 1,049 projects. This number is equivalent to 5% of the total projects, 7% of the registered capital, and 14% of the implementing capital of inbound direct investment to Vietnam in the same period.
Vietnam’s overseas direct investment (ODI) plays an increasing role in stabilizing and developing the Vietnamese economy. ODI helps compensate for the lack of domestic resources, opens new markets, and strengthens Vietnam’s stance in the countries receiving investment. Following the proposal to promote Vietnam’s overseas investment established in Decision No 236/QD-TTg (2009), Vietnam has increased investment in the mining, petrol, agro-forestry, water electricity, information technology and urban infrastructure sectors. These are the main sectors of Vietnamese ODI, with each having over 1 billion USD in registered capital.
Up to early 2016, Vietnam has invested in 68 countries, including the Mekong Sub-region. Particularly, Laos and Cambodia are the two nations that are most popular among Vietnamese investors. Preferential procedures and policies to encourage investment and foreign economic relations in the Vietnam-Lao-Cambodia border area are stipulated in the Prime Minister’s Decision No 482/Q?-TTg (2010). In addition to similarities in natural, economic and social conditions, the three countries share a common comparative advantage in the sector of agro-forestry investment. Agro-forestry is the second largest sector in Vietnam’s overseas investment structure, and it ranks third in Laos’ and Cambodia’s foreign direct investment (FDI) and domestic direct investment (DDI) receipt structure (2011-2015).
Alongside poverty reduction accomplishments and improvements in infrastructure, Vietnam’s overseas investment in agro-forestry holds risks due to the differences in culture, laws and environment. These differences can lead to conflicts which can affect the project implementation as well as the image of Vietnamese investors in the region.
Acknowledging the environmental and social risks of overseas agriculture investment, the Vietnam Chamber of Commerce and Industry, People and Nature Reconciliation and Oxfam in Vietnam have conducted research to rapidly assess the reality of agricultural investment in Laos and Cambodia. It aims to identify the problem and mobilize the Pioneer Enterprise Group to initiate development of Voluntary Guidelines to mitigate environmental and social risks for Vietnamese enterprises investing in the agricultural sector in the Mekong sub-region.
This workshop on “Sustainable Agricultural Investment of Vietnamese Businesses in the Mekong Sub-region” is organised based on this research and the draft Voluntary Guidelines for Enterprises. The organisers hope that the workshop would be a forum for enterprises, government agencies, and civil society organisations to exchange experience and solutions to finalize the Voluntary Guidelines and contribute to Vietnam’s overseas investment policy.
- Introduce the research report: “Vietnamese agriculture investment in Cambodia and Laos: Benefits, Impacts and Challenges”;
- Consult to finalize the voluntary guidelines to mitigate environmental and social risks for Vietnamese enterprises investing in the agriculture sector in the Mekong sub-region
- First step to establish a platform to connect enterprises, state management agencies, and national and international civil society organisations
The workshop was held on February 17, 2017 in Hanoi, with around 120 participants, including: Enterprises and enterprise associations investing in agriculture; State management agencies regarding overseas investment; National and international research institutes, civil society organisations and non-governmental organisations and Banks, investment funds and international donors.
Mr. Doan Thanh Nghi, Foreign Investment Agency, Ministry of Planning and Investment
Vietnam ODI in agriculture in Cambodia and Lao
Dr. Pham Quang Tu – Oxfam in Vietnam
Mitigating social environmental risks for ODI in Agriculture
Nguyen Hoang Phuong – PanNature
Mr. Pham Quang Tu – Oxfam Vietnam
Mr. Nguyen Minh Duc – Vietnam Chamber of Commerce and Industry
Mr V? Ninh – GEMADEPT Corporation