“Beyond Apple and Nvidia: Vietnam’s Approach to Attracting Foreign Investment” Let me know if you would like me to elaborate on this title or provide any additional content to support it. I am happy to use my creative writing skills to craft compelling content that meets your needs.

What, in your opinion, were the most notable economic highlights of 2024?

The most prominent highlight of 2024 was the continuous improvement in the growth rate, with each quarter performing better than the last. The upward trajectory of the economy is evident.

Looking back, we saw in the first quarter that the domestic economic sector faced extraordinary challenges. For the first time, the number of businesses withdrawing from the market (nearly 74,000) far exceeded the number of new establishments (less than 60,000) [a ratio of 1.23/1], while previously, this ratio was usually only 1/2 or 2/3. This figure is a very high alert.

In reality, the domestic economic sector in 2024 encountered unprecedented difficulties since the renewal. The accumulated difficulties over the years, due to objective and subjective factors such as COVID, bad debts from previous years, difficulties in market and capital access, and institutional bottlenecks, etc., have had severe consequences – the economy is slow to recover, struggles to rise, and the health of Vietnamese businesses has been eroded and exhausted…

The question of “why the external sector is still doing well while the domestic sector remains weak for so long” reflects the perennial paradox of our economy and is one of the key issues in the development strategy that has not been adequately addressed so far.

However, after the first quarter, with each subsequent quarter, the overall situation improved significantly. The economy became more “connected” with the world, gradually rising to become one of the bright spots in investment attraction and growth in the region and the world.

Up to now, the situation of the domestic sector has been improving day by day, with both indicators – the number of newly established businesses and those leaving the market – showing positive signs. From the “warning” signal at the beginning of the year, the improving trend of the economy throughout 2024 has become a “bright spot”, indicating a very meaningful “turnaround” prospect.

These two bright spots are the foreign trade and investment attraction axes. In a world full of instability and difficulties, maintaining good performance on both of these “diplomatic” fronts is indeed a very significant achievement. 2024 continues to affirm the strategic role of the two leading growth drivers, the “wings” that help the economy take off: foreign investment and foreign trade activities.

Along with the positive aspects, what should we pay attention to?

The first thing to note is that in attracting foreign investment, it is important not only to consider the amount of capital but also its spillover and leading effects. I want to talk about the future impact of this resource on the economy, rather than its “quantitative – temporary” contributions [increasing GDP output and creating low-wage jobs]. In 2024, investors who will decide the future – related to semiconductors, artificial intelligence, green development, high-quality human resource training, and innovation, etc. – have emerged and started to “cluster” in Vietnam.

However, in reality, the attraction of new capital flows, although signaling a change in the structure and quality of investment, still has a large proportion of low-level FDI projects, including many projects coming to Vietnam to “avoid taxes” and “dodge blows” from the US after Mr. Donald Trump was elected president. This capital flow has a strong crowding-out effect on Vietnamese businesses, increasing the risk of the economy’s heavy dependence on low-level FDI. And if we’re not careful, Vietnamese businesses will also be “affected”, bearing the brunt of “punishment” from the US. Not to mention the rampant trend of cheap goods from abroad, following the “foreign” e-commerce platforms pouring into the Vietnamese market.

Furthermore, the vision for foreign investment needs to be carefully considered. If we continue to attract investors en masse who are not suitable for the current stage of economic development and future needs, the long-term negative impacts may outweigh the short-term benefits. These are the points to keep in mind when evaluating the positive and negative factors of 2024, which need to be identified and turned into strategic choices.

In 2024, public investment disbursement was strongly promoted, but the actual figure was not high, reaching only 52.29% of the plan in the first ten months. What do you think about this issue?

I think the government’s efforts are unquestionable. If we look at the relative figure, the current disbursement rate may not be impressive, but in absolute terms, the disbursement volume in 2024 is much higher than the previous year.

However, public investment disbursement remains a concern in the current mechanism. Why is there money but it can’t be used when the state itself needs capital to accelerate the implementation of large projects and “inject money” quickly into the economy? The problem lies in the system and policies.

Currently, the factors hindering the investment process are determined to be “spread across” the system, not just in a specific field. From the Land Law, Investment Law, to the division of functions, responsibilities, and powers between the central and local levels, and between ministries and sectors, all contribute to the difficulties. Public investment disbursement is not just an issue for a few specific agencies but for the entire system. It is constrained by many legal provisions, making it difficult for state capital to move into the market and operate according to market mechanisms.

At present, the blame game is common: one side blames the other, and the other depends on another. This is not wrong when considered in a divided space, according to local logic. But it stalls the entire process. Only when personal responsibility is pushed to the limit, step by step, becoming clear, will the bottlenecks in the system be completely removed.

Currently, the growth momentum from attracting FDI remains very strong. How can we attract high-quality investors to contribute to Vietnam’s leap forward in the future?

In reality, semiconductors are a special source of power that will determine the future of humanity. But the goal of becoming a force in this field is no longer as simple as it used to be. The demand is high, the conditions for implementation are extremely difficult, and the competition is extremely fierce. For semiconductors, it is not just a matter of needing a large amount of electricity or high-quality human resources, but also the need to meet many other factors related to politics, military, and even the so-called “choosing sides” strategy. Participating in this game is not just based on ordinary resource conditions but also requires a certain position in the “chain” of major economic powers.

The first challenge lies in the fact that the semiconductor industry produces extremely small products but requires enormous capital investment. Projects in this field often require “billion-dollar” capital, even tens of billions of dollars. The entire chain or each link in the chain requires huge capital. And the new investment logic implies the requirement of the host country to contribute a significant amount of capital to “support investment”. Previously, investors only needed the host country to provide land, electricity, and human resources. But now, the investment conditions have changed. They demand the sharing of very large financial resources. This logic is ruthless, posing an unprecedented challenge for latecomers who are still poor but have the ambition to “rise” like Vietnam.

Not to mention that to have a semiconductor industry, we also need a huge amount of capital to invest in the development of clean energy sources and the construction of modern digital infrastructure…

Therefore, to truly “rise”, Vietnam’s approach to attracting investment should not only focus on inviting technology corporations like Apple or Nvidia but also seek large financial resources from global investment funds and financial institutions. This is a “sufficient” strategy to participate in the “semiconductor battlefield”, instead of just focusing on high-tech names while ignoring financial resources of this scale.

The approach to human resource training for the new era must also be very different. We are stepping into a new era, an era in which memory has been technologically supported and replaced to a large extent. Up to now, the main content of “improving capacity” has been “acquiring knowledge”. This is mainly a “passive” process, but so far, it has been the dominant method of education. In reality, human intellectual capacity is mainly determined by “memory capacity” and the ability to use a “passive” knowledge base.

But now, “memory” has been “liberated” by computers and artificial intelligence. The most important thing in education and training is no longer “memory capacity” or the acquisition of passive knowledge but teaching how to ask questions and develop the capacity for innovation in individuals.

In conclusion, I want to emphasize that to overcome and enter a new era with high technology and semiconductors, we need new solutions and approaches. The change must be strong and unusual, and we cannot continue to follow the usual logic, or we will not solve the problem.

As we know, semiconductors require a lot of energy. Simply put, Bitcoin mining consumes hundreds of times more energy than previous activities, and artificial intelligence is even more terrifying. Notably, the energy required for semiconductors must be clean and in large quantities. To solve this problem, in the current conditions of Vietnam, we need unusual and determined thinking.

The new era presents entirely new and different stories. Some people think that it is enough to just go big. But in reality, just missing a beat, making a wrong turn in technology, or failing to connect to the chain can lead to a rapid downfall. Nokia phones are a case in point. And currently, some “big guys” in technology, such as Huawei, Intel, and Samsung, are facing such difficulties and risks.

You once shared about the “three blockages” and the paradox in the economic growth of the domestic sector that need to be focused on. How should this problem be solved?

The development paradox that the Vietnamese economy has fallen into is mainly due to the “bottleneck of bottlenecks” in the institution. To resolve this, it is necessary to “unblock” the resources, both input and output. That is to say, the infrastructure connection must be smooth. But infrastructure is not the only factor.

To smoothen the flow of resources, the mechanism must be streamlined. The overlapping regulations – which are countless in our country – need to be removed. But to streamline the mechanism, governance must be intelligent, and people must be intelligent. Simply because the mechanism depends on people.

However, just identifying the problem is not enough; we need to actually address each bottleneck and know how to prioritize breakthroughs, starting with the central knots.

At the national level, it is crucial to know how to prioritize issues. Specifically, to address the institutional bottlenecks, we need to stand firm on the market perspective. Among the markets, the resource market, the land market, and the financial market have a decisive importance, and we need to focus on unblocking these areas. If the markets, which are the very foundation of a market economy, are not “unblocked” to operate smoothly, then we are “handcuffed”. From the market foundation, we can then correctly address the “bottleneck” of resource allocation in the form of “begging – giving”. Otherwise, it will only get more complicated.

In turn, the reform (elimination and replacement) of the “begging – giving” mechanism needs to be considered in relation to the budget system and the Budget Law, in which the localities are “allocated” very few rights and are almost only given the “right to beg” for solutions. The logic of “local self-determination, self-action, and self-responsibility” naturally arises from this.

Regarding the budget story, why is 70% of the budget used to feed officials and the apparatus, leaving only a small amount for investment – how can there be large-scale projects to “turn the tide”? Salary is directly linked to the entire apparatus and is related to the responsibility of the apparatus. This is a systemic problem that has not been solved for many years. We just keep reforming salaries without realizing that the problem lies in the “work”, that is, in the functions of the apparatus and the degree of completion of the work, that is, the responsibility of individuals in functional positions.

The principle is simple. But if we reverse it a little, we will struggle for decades with an inefficient apparatus.

Along with this, we must accept trial and error. The experience of 1986 is a typical example. At that time, many efforts were made to unblock the institution, such as “bringing prices closer to market prices” and gradually abolishing the rationing system for gasoline, food, etc. The economy advanced very cautiously, step by step, in separate, local areas, to create a market economy. This was a process of trial and error, without fear. The economy “convulsed” due to this cautious, local trial and error process. But thanks to that, the private economy was allowed to exist and operate as a “respectable” economic component, the economy recovered from the crisis, and entered a new stage of development in quality.

The process of “trial and error” and making breakthrough decisions is not necessarily absolutely perfect, but it has historical value in the right direction. The talent of a leader is to dare to make the right decisions at the right time, opening the way for changes that are in line with the trend of the times.

With the effort to unblock the bottleneck, what do you expect from the Vietnamese economy in 2025?

I think the main growth drivers in 2025 will still be the foreign investment and foreign trade sectors. The domestic sector is also showing clear signs of improvement, with the hope of getting better and faster.

Reforms of bottlenecks, especially in real estate and capital access, are gradually being removed. The stagnation in real estate and capital is affecting many industries, but when these bottlenecks are removed, the economy will develop according to the “snowball effect”, meaning that when one problem is solved, it will create a positive spillover effect that will strengthen in the economy.

Accordingly, 2025 is expected not only to be the last year of the plan but also to be a decisive year, affirming the strength, momentum, and better position of the economy as it enters a new phase.

2025 also contains the potential for breakthroughs. This