MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY —-—s9 9 Ocace--—-- MASTER THESIS ATTRACTING FOREIGN DIRECT INVESTMENT IN EDUCATION AND TRAINING IN VIETNAM HOANG MINH QUYEN Hanoi - 2023 MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY MASTER THESIS ATTRACTING FOREIGN DIRECT INVESTMENT IN EDUCATION AND TRAINING IN VIETNAM Major: International Economics Code: 8310106 Full name: Hoang Minh Quyen Supervisor: Assoc. Hoang Xuan Binh Hanoi - 2023 STATEMENT OF ORIGINAL AUTHORSHIP Thereby declare that this thesis was carried out by myself under the guidance and supervision of Assoc. Hoang Xuan Binh and that the work contained and its results are true by the author and have not violated research ethics. The data and figures presented in this thesis are for analysis, comments, and evaluations from various resources by my work and have been duly acknowledged in the reference part.
In addition, other comments, reviews, and data used by other authors, and organizations have been acknowledged, and explicitly cited Author Hoang Minh Quyen SUMMARY OF MASTER THESIS The introduction highlights the fundamental importance of education and training in Vietnam and its critical role in the country's development, as enshrined in the Constitution. It emphasizes the need for a comprehensive development strategy to align with modem trends and international standards in response to globalization. With Vietnam's ongoing economic development and international integration, attracting Foreign Direct Investment (FDI) into education and training emerges as a vital strategy to enhance the workforce and meet labor market demands. However, despite some FDI projects in education, the sector's growth remains uneven, and this discrepancy sets the stage for the research topic.
The author's research aims to address the critical issue of attracting Foreign Direct Investment (FDI) in education and training in Vietnam, recognizing its pivotal role in the country's development. The thesis delves into various facets of this topic, offering comprehensive insights and practical solutions to stimulate FDI inflows. The conclusion encapsulates the key findings and implications of the research. It underscores that while Vietnam has seen substantial FDI growth across various sectors, the education and training sector still awaits substantial investment.
ACKNOWLEDGEMENTS I would like to extend my deepest appreciation to my defense committee, whose wealth of knowledge and expertise greatly contributed to the success of this endeavor. I would also like to acknowledge the generous support from the Faculty of Graduate Studies of Foreign Trade University, without which this undertaking would not have been possible. Furthermore, | am immensely grateful to my Associate Professor, Dr. Hoang Xuan Binh, for his exceptional patience and invaluable feedback throughout this journey I am indebted to my classmates and friends for their assistance in editing, providing feedback during late-night sessions, and offering moral support.
I would also like to express my gratitude to the librarians, research assistants, and study participants from the university who have had a profound impact on me and served as a source of inspiration. I am profoundly grateful to my parents for their unwavering support and continuous encouragement throughout my years of study, as well as during the research and writing process of this thesis. This achievement would not have been possible without them. Thank you sincerely.
iii TABLE OF CONTENTS STATEMENT OF ORIGINAL AUTHORSHIP. SUMMARY OF MASTER THESIS ACKNOWLEDGEMENTS. TABLE OF CONTENTS LIST OF ABBREVIATIONS LIST OF TABLES. LIST OF FIGURES AND BOXES INTRODUCTION.
Research Objectives and tasks. Research tasks 4, Research Object. Scope of the research, 6. Data Analysis Methods.
Thesis Structure CHAPTER 1: THEORETICAL BASIS OF FOREIGN DIRECT INVESTMENT ATTRACTION IN EDUCATION AND TRAINING. Overview of Foreign Direct Investment (FDI 11. Definition of FDI 10 1. Characteristics of FDI.
Types of FDI B 1. The role of FDI. Overview of education and training 1. Definitions of education and training 16 iv 1.
Characteristics of education and training 16 In summary, education and training have diverse and flexible characteristics, playing a vital role in meeting the needs of individuals and society, providing knowledge, developing skills, and imparting ethical education, thus contributing to the economic and social development of a nation. Investment sources for the development of education and training in Vietnam 18 1. The role of attracting Foreign Direct Investment (FDI) in the development of education and training in Vietnam 23 1. Indicators of FDI attraction in the education and training sector .4, Determinants of FDI attraction in Vietnam's education and training sector 27 1.
The demand for education and training of Viemamese people. Vietnam’s Policies and mechanisms to attract FDI in education and Training. Technical infrastructure for education and training 29 1. Quality and cost of human resources 30 1.
Vietnam's socio-political situation 30 CHAPTER 2: THE CURRENT SITUATION OF ATTRACTING FOREIGN DIRECT INVESTMENT IN EDUCATION AND TRAINING IN VIETNAM IN THE PERIOD OF 2019-2022. Overview of FDI attracion in the education and training sector in Vietnam from 2019 to 202: 31 2. Scale of FDI in the Education and Training Sector in Vietnam 31 2. The proportion of FDI in the education and training sector in Vietnam.
Structure of FDI inflows into the education and training sector in Vietnam. Analysis of FDI attraction in Education and Training in Vietnam during the period 2019-2022 46 2. Overview of FDI attraction in education and training based on evaluation indicators. Evaluation of determinants of FDI attraction in education and training in Vietnam during the period 2019-2022 53 2.
Evaluation of achievements, limitations in FDI attraction in Education and Training in Vietnam. Discussion 72 CHAPTER 3: ORIENTATIONS AND POLICY IMPLICATIONS TO ATTRACT FOREIGN DIRECT INVESTMENT IN EDUCATION AND TRAINING IN VIETNAM. Orientation for the development of education and training in Vietnam until 2025, vision until 2030 77 3. Orientation for FDI attraction in education and training in Vietnam by 2025, Vision until 2030 80 3.
Economic and living standards enhancement. Legal framework improvement. Infrastructure and technology upadate 84 3. Workforce quality improvement 85 3.
FDI management system enhancement 87 CONCLUSION. vi LIST OF ABBREVIATIONS FDI Foreign Direct Investment ODA Official Development Assistance GDP Gross Domestic Product IMF International Monetary Fund WTO World Trade Organization UNDP United Nations Development Programme OECD Organisation for Economic Co-operation and Development ASEAN Association of Southeast Asian Nations AEC ASEAN Economic Community EU European Union BCC Business Cooperation Contract BOT Build-Operate-Transfer BTO Build-Transfer-Operate BT Build-Transfer PPP Public-Private Partnership GATS General Agreement on Trade in Services AFTA ASEAN Free Trade Area EI Emotional Intelligence HDMI High-Definition Multimedia Interface vii LIST OF TABLES Table 1. Expenditure ratio for education and traing in Vietnam (2019 - 2022). Top 5 biggest investors in Vietnam in 2022.1: Scale of FDI in the Education and Training Sector during the 2019-2022 period.2: Scale of FDI in the Education and Training Sector by Project Form.3: Proportion of FDI in the education and training sector of total FDI during the 2019-2022 period.4: FDI distribution by investment sectors during the period 2019 - 2022.5: The structure of FDI in the education and training sector by investment partners.6: Structure of FDI sources in the education and training sector by investment location during the period 2019 - 2022.---22+222zz2222zzrerrrrrrrrrrrrrrrrrrrrrrr 40 Table 2.7: Proportion of FDI in the education and training sector of total FDI during the 2019-2022 period.
47 viii LIST OF FIGURES AND BOXES Figure 2.1: Structure of FDI sources in the field of education and training by investment locations during the 2019 - 2022 period.2: FDI Strueture by Investment Sector.3: FDI Source Structure by Investment Sector.1: Opinions of International Cooperation Department Officials - Foreign Trade University.2: Opinions of University Leaders - Foreign Trade University.3: Opinions of Officials from the Foreign Investment Agency - Ministry of Planning and Investmeni. Rationale Education and training have always been of great importance to the Vietnamese Government, clearly identified as a critical sector that plays an essential role in leading the country towards prosperity. The 1992 Constitution, in Article 35, stipulates that “Education is a top national priority”. By 2001, the 1992 Constitution was amended and supplemented to emphasize further that “Developing education is a top national priority”.
In order to develop the field of education and training and effectively meet the demands of intemational integration and globalization, a comprehensive development strategy is needed that aligns with modem trends and updates regional and international standards. According to Mr. Pham Binh Minh, Deputy Prime Minister of Foreign Affairs: “Today, under the Socialist Republic of Vietnam, Vietnam has established diplomatic relations with 192 out of 200 countries around the world; establishing a stable and long-term relationship framework with 30 strategic and comprehensive partners, creating a solid foundation for Vietnam and other countries to raise the level of cooperation for the benefit of each country With the current development and international integration of the Vietnamese economy, attracting FDI into education and training is considered as one of the effective ways to improve the workforce and meet the needs of the domestic and regional labor market. According to the “FDI data summary report in 2019 ~ 2022” of the Department of Planning and Investment, the Ministry of Planning and Investment, up to now, Vietnam has attracted 605 foreign investment cooperation projects in the field of education with a total investment capital of over 4.
However, most of the projects are mainly concentrated in two cities, Hanoi and Ho Chi Minh City, accounting for 91.23% of the total registered capital. In addition, the rate of attracting foreign investment in education is still very low compared to the target set by the Government. Specifically, Resolution No. 35/NQ-CP dated June 4, 2019 of the Government on enhancing the mobilization of social resources for investment in education and training development in the period of 2019 ~ 2025 by 2025, the number of non-public educational institutions must account for 16% of the total number of educational institutions in Vietnam.
However, in fact, in the 2020- 2021 academic year, there were only more than 3,800 non-public educational institutions (accounting for more than 9%) out of 42,080 educational institutions across the country. And among non-public educational institutions, foreign-invested educational institutions account for only 17%. Stemming from the above facts, with the view to promoting FDI in the field of education and training in the near future, the author chooses the topic “Attracting foreign direct investment in education and training in Vietnam” as the research topic. Literature Review When researching about FDI and education and training in Vietnam, there are many domestic and foreign studies Firstly, research about FDI includes a number of studies such as: Tong Quoc Dat (2005) with the research paper “FDI structure by economic sector in Vietnam” systematized the fundamental theoretical issues about FDI, researched and analyzed some models of the dynamics of economic sector structure.
The author evaluated the status of FDI by economic sector in Vietnam and identified some main viewpoints and solutions to attract FDI by economic sector. Do Hoang Long (2008) in the research paper “The impact of economic globalization on FDI inflows into Vietnam”. The paper studied the impact of the economic globalization process on FDI flows in the world into Vietnam. The research analyzed the global trends of FDI flows and proposed some solutions for attracting FDI into Vietnam.
Hoang Thi Bich Loan (2018) with the paper “Attracting FDI of transnational companies into Vietnam”. The paper deeply analyzes the current state of FDI of TNCs into the Vietnamese economy from the 1990s to the present the main prospects, directions, and solutions to develop and attract FDI of TNCs into Vietnam. Le Thi Thuy Linh (2018) in a paper titled “Factors Affecting Foreign Direct Investment Attraction” focused on the factors influencing the attraction of foreign direct investment (FDI) in Vietnam based on empirical evidence. The study used data from official sources such as the Ministry of Planning and Investment, State Bank, and General Statistics Office, and applied a multiple regression model for analysis.