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Enhancing cooperation with FDI enterprises

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The paper presents an overview of key issues in the process of strengthening effective relationship with foreign direct investment region. Based on that, the author offers some suggestions for Vietnam to switch from growth model of volume to the growth of quality through FDI technology transfer and determine policy priorities. | Vietnam Social Sciences, No. 3(167) - 2015 Enhancing Cooperation with FDI Enterprises Kenichi Ohno * Le Ha Thanh ** Abstract: The paper presents an overview of key issues in the process of strengthening effective relationship with foreign direct investment region. Based on that, the author offers some suggestions for Vietnam to switch from growth model of volume to the growth of quality through FDI technology transfer and determine policy priorities. Key words: Foreign direct investment, businesses, Vietnam. 1. The expectation of attracting foreign direct investment Like many countries in the world, Vietnam expects to attract foreign direct investment (FDI), including job creation and income, transfer of technology, participation in international production networks, contribute to the tax revenue and reduce financial difficulties. Creating jobs and income is one of the positive impacts of FDI. For a country with young population and growing new workers each year like Vietnam, the presence of labor-intensive FDI is welcomed because it creates jobs and income for new employees, reduces the problems of unemployment and underemployment. This situation is common in a low-income country with a large number of unskilled workers. Most ASEAN countries such as Malaysia, Thailand has adopted such policies in the previous period. Job creation remains the overall policy objectives in India today. However, when the countries overcome low-tech production, wages began to rise and shortages of skilled labor have 20 appeared, policies need to move from creating any job to the high salary jobs. Technology transfer is a benefit that the host country expected most from FDI. Attracting multinational corporations (MNCs) with both capital and technology will create favorable conditions for technology transfer and business know-how, make contribution to increasing the productivity and competitiveness of domestic enterprises. Actually, there are two types of spillovers: horizontal .