Not until the recent factory riot did people realize the important role of the Foreign Direct Investment (FDI) sector in Vietnam economy. GDP growth was spearheaded by FDI in 2013 and 1Q14, where FDI sector enjoyed a much higher growth rate in construction, foreign trade and employment. Given the fact that Vietnam currently runs a budget deficit and the whole economy and in particular, the banking system is still deleveraging, support from foreign investments is what is needed to salvage growth.
FDI is synonymous with labor intensive sectors (such as garment and textile, footwear, electronics assembly,...) which continues to be a refuge for Vietnam's rising labor force. Should these labor intensive sectors fall prey to recent events, unemployment rate might surge, and social unrest might supersede.
Vietnam's Top FDI Investors in 2013
Source: MPI
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