e learned as followings: 1. Due to the difficulties in the business of Asian investors in their own countries, the situation made them unable to invest or pour their small amount of money remaining through the crisis into other countries. In other words, they were unable to expand their business; on the contrary, they had to tighten their belt, re-structured indigenous enterprises. In addition, other project owners had to pay debts when exchange rate went down. That is the obstacles from the side of foreign investors.2. The crisis, which caused the devaluation of the currencies of many Asian countries and the appreciation of the Vietnamese dongs vis--vis other regional currencies, made the prices of Vietnamese exports higher than similar exports of neighbour countries such as Thailand and Indonesia by 20%-30%. At that time, investment projects focusing primarily on exporting goods became inefficient, thus resulting in decrease in FDI.3. Investment environment is a decisive factor to deterred foreign investors. At that time, many shortcomings of Vietnam’s investment environment emerged more evidently than ever through a number of failing joint ventures.4. Together with our weakness is the emergence of new attractive markets from neighbor countries, such as China, India and Indonesia. As compared with Vietnam, these 3 countries have a stronger appeal in many respects, with respect to industrialization, and investment polices. Therefore, a big, major share of FDI inflows pours into them.5. Many investors realized that Vietnamese market now glutted with consumer goods, hotels, restaurant and office blocks, seemed to be saturated and no longer was a lucrative one to them.II. INDIRECT CAUSES:1. Market: Low purchasing power of the market: In terms of population, the domestic market is quite big (80 million) but its purchasing power is not big. In fact, in 1996 and 1997, many domestically-produced good were not selling well and h...
