As the most dynamic part of the Vietnamese economy, questions linger over how prepared Ho Chi Minh City is to lure foreign direct investment (FDI) flows after being hit by the effects of the novel coronavirus (COVID-19) epidemic over a long period of time.

During the past five months the southern metropolis has granted 450 new projects with a total registered capital of over US$248 million, of which 80 of them have subsequently made adjustments to increase capital.

More than 1,900 investors have contributed capital, purchased shares, and bought back contributed capital with a total value in excess of US$1.2 billion. The major fields in terms of FDI attraction are trade, technology, processing, and manufacturing, with Japan currently the leading country in terms of foreign financiers, accounting for 32% of total investment capital in the city.

According to Hirai Shinji, chief representative of the Japan External Trade Organization (JETRO) in Ho Chi Minh City, the country has always represented an attractive investment destination for firms from the Far East nation and will continue to do so after the epidemic. Indeed, Japanese enterprises can enjoy a wealth of opportunities to expand production locally and have high hopes for Vietnamese growth throughout the remainder of the year.

Moreover, the country not only serves as a significant manufacturing destination but is also an attractive consumption market for Japanese businesses. However, in order to attract foreign investment, the nation must search for greater investment in infrastructure development.

In order to truly make a difference and attract investment, industrial parks need to promote restoration and should be fully prepared to boost infrastructure facilities with a particular focus given to issues such as electricity, energy for production, and transport infrastructure.

These things can help to facilitate a consistent transportation of goods and can swiftly deal with transmission line instability in terms of information and technology infrastructure, according to Shinji.

When it comes to investing in the country, transport infrastructure and administrative procedures are often the two main issues that concern foreign businesses. As a means of becoming a reliable destination for FDI enterprises after the COVID-19 epidemic, Le Thi Huynh Mai, director of the Department of Planning and Investment of Ho Chi Minh City, has suggested increasing the allocation of capital for key transportation projects whilst also intensifying the inspection of construction progress.

This year has seen the southern city attempt to accelerate ongoing projects and administrative reforms by adjusting the time it takes to grant investment certificates to between seven and 10 days, down by three to five days compared to before.

Besides seeking to improve infrastructure and boosting administrative reform, the city is promoting the creation of an industrial land fund, speeding up the deployment of a number of industrial parks, while increasing the number of industrial parks to 23. In addition, the southern metropolis has proposed the development of a 280-hectare high-tech industrial park in Binh Chanh district.

The way the country has been able to deal with the COVID-19 epidemic is a testament to the nation representing a safe investment destination for foreign businesses, with Ho Chi Minh City in particular viewed as an attractive investment location that enjoys many advantages.

Therefore, the city must move to promote its strengths as a major economic hub that connects provinces throughout the southern region and creates a close link in terms of supply, production, and distribution to attract and retain foreign investors.