2.... Despite the negative socio-economic consequences ofthe global COVID-19 pandemic, Vietnam is one of the few countries that recorded positive economic growth and increased GDP by 2.91 percent in 2020. This reflects two key factors, 1. the relative success in containing the health and business risks of the pandemic, and 2. the ability of the country to keep investor confidence high. Vietnam's FDI inflows can be briefly summarised below: Vietnam's GDP grew at 2.91 percent and recorded positive growth in key areas of industrial activity In the first 11 months of 2020, foreign investors invested US$17 billion in Vietnam with a significant portion of these projects targeted at manufacturing, processing, real estate, and electricity production and distribution. Efficiency gains and consumer demand were key components of Vietnam's investment attractiveness. Moving forward, these could be supplemented by an expanding digital economy as well as Vietnam's participation in multiple regional and global trade agreements

Additionally, sub-sectors such as construction, utilities, and manufacturing all recorded positive growth rates. However, the service sector was negatively impacted by mobility constraints and reduced spending. For instance, the transportation and hospitality sector contracted by 1.8 percent and 14.6 percent respectively, which caused the economic growth of 2.91 percent to be asymmetrically distributed in 2020.

A brief overview of Vietnam is presented below Land area Approximately 331,000km2 Capital City Hanoi Provinces & Cities 63 Average annual Income Over US$2,838 Population 97.6 million (2020) 98.2 million (2021(f)) 56.0% is working age Average age 32 Total FDI capital US$28.5 billion (2020) New FDI projects numbers 2,523 (2020) Inflation 3.2% (2020) 2.1% (2021(f)) GDP Growth% 2.9% (2020) 5.5% (2021), GDP/capita US$3,498 (2020) US$3,759 (2021(f)) GDP by sector (2020) 41.6% Service 33.7% Industry 14.9% Agriculture

Vietnam-Asia's fastest growing economy Over the years, Vietnam has been seen as one of the fastest and relatively stable- growing economies in Asia. The country was also found to have weathered the 2009- 2010 global financial crisis rather well with encouraging macro-economic indicators. Recently the Vietnamese Government is placing keen effort in boosting international economic integration through the participation of Vietnam into many free trade agreements/ communities such as, the World Trade Organization (WTO), Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), EU-Vietnam FTA, and UKVietnam FTA. Hence, this has led to a significant increase in FDI growth over the years. The future of Vietnam as a dynamic FDI hub can be attributed to its relatively stable political environment, low labour and operating costs, as well as promising economic prospects. This would further propel Vietnam as a dynamic market and an attractive destination for both foreign and private investors to participate in.

Ethical implications of FDI Whilst FDI can be beneficial for both home and host countries, there are some likely negative implications of its activities specifically on host countries. These include environmental issues such as pollution, deforestation, and resource depletion amongst others. Also, some aspects of FDI activity can negatively impact socio- cultural factors such as unfair labour practices, ethnocentric business practices and poor human resource management as some examples. Unfortunately, these poor ethical practices by foreign investors may contribute towards many problems for host countries such as poverty, income disparity and sluggish economic growth. Hence, it is equally important for international business practitioners to consider these implications on their FDI activities overseas.

Question

Describe the FDI eclectic paradigm theory and its application on international business management practice.