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Vietnam fails to attract high technologies in FDI projects 9:49 AM,4/15/2013
A recent report by the Ministry of Planning and Investment (MPI) showed that high technologies have not been transferred to Vietnam as it expected when attracting foreign direct investment (FDI).
According to MPI’s Deputy Minister Dao Quang Thu, 80 percent of Vietnamese enterprises are utilizing middle class technologies, 14 percent using low and backward technologies, and only 5-6 percent using high technologies.
In many cases, foreign investors exploiting the loopholes in the Vietnamese laws, brought backward and environment polluting technologies to Vietnam.
“The imported low technologies have led to the fact that Vietnamese enterprises mostly do the outsourcing for foreigners,” the MPI’s report reads.
“Some enterprises are listed as “high technology firms,” which are the subsidiaries of global groups. However, the production phases which need high technologies are not carried out in Vietnam. As a result, Vietnamese enterprises can only make low added value, thus unable to join the global production chain,” the report continues.
According to the Ministry of Science and Technology (MST), only 838 technology transfer contracts were registered and granted licenses in 1999-June 2012. Of these, 50 percent belonged to FDI projects. It’s obvious that 400 technology transfer contracts is a too modest figure if noting that there were 14,000 operational FDI projects.
Despite the great efforts made by the government of Vietnam and the policies to encourage the high technology transfer, the high technologies still have been staying away from Vietnam.
MST believes that Vietnam can only approach the world’s advanced technologies in some industries, including telecommunication, oil and gas, civil engineering.
However, in general, the technology transfer to Vietnam remains far below the expectations.
Economists urge to change policies
Also according to the ministry, most of the technologies transferred to Vietnam are the ones equal or higher than the existing ones, but these are just the medium class technologies in the region.
The problem is that the technologies brought to Vietnam have been chosen to serve the investors’ benefits, while they are not the technologies Vietnam wants to serve in its program on technology renovation.
In principle, foreign investors take responsibility about the technologies they utilize for their investment projects in Vietnam. They have to give explanations to the state management agencies about the technologies and prove that they fit the purposes of the projects, and that these are the optimal choice in comparison with other technologies.
However, as Vietnamese tends to simplify the administrative procedures, foreign investors nowadays are not required to give detailed explanations about technologies any more. Therefore, the agency in charge of examining the technologies in FDI projects cannot make exact appraisals.
Under the current decentralization mechanism in licensing investment projects, local authorities have the right to grant licenses to investors. Meanwhile, they don’t intend to consult with local or central science departments before licensing.
Vietnam tends to focus on the post-licensing examination instead of pre-licensing examination. As a result, it cannot prevent backward and environment pollution technologies from entering Vietnam. Meanwhile, no state management agency would come forward and take responsibility for the consequences caused by the backward technologies when they find the problems in the post-licensing period.
Source: Vietnamnet
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