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Local Economy

Last updated: Monday, November 20, 2017

 

Incentive for Mekong River Delta Growth

Posted: Monday, April 16, 2012


After 25 years of innovation, and 10 years of implementing the Resolution 21 – NQ/TW of the Politburo of the Communist Party of Vietnam, the economy of the Mekong river Delta has experienced substantial changes and has gained comprehensive achievements, increasingly asserted its position as a major source of food security and agricultural export commodities of the whole country.
Granary of the whole country
According to Mr Nguyen Phong Quang, Deputy Chief of the Permanent Steering Committee for the South West, the most praiseworthy success is improved provincial investment environment with high provincial competitiveness index (PCI). Provincial economic growth reaches 11.7 percent a year, 1.8 times higher than the national average. Contribution to the state budget in 2010 was VND28,101 billion, 6 times higher than in 2001. The economy has also been positively restructured. At the end of 2010, compared to 2001 – 2005: the proportion of agriculture, forestry and fisheries in GDP decreased from 44.92 percent to 39 percent; the industry and construction sectors attracted more workers, raising their proportion in GDP from 23.3 percent to 26 percent; and the proportion of commerce and services increased from 31.78 percent to 35 percent.
 
The Mekong River Delta has an important and strategic position in national socio-economic development, security and defence; it has now become the largest provider of agricultural and forest food products of the whole country, contributing to national food security. With higher rice productivity the region has managed to increase from 16 million tonnes to 21.6 million tonnes annually, up 35 percent. The whole region annually exports over 6 million tonnes of rice, earning over US$3 billion that accounts for about 90 percent of export revenue of the whole country. Aquaculture and seafood production has seen many improvements. The area of aquaculture has increased from 236,200 ha in 2001 to 736,400 ha, the production reached 1.9 million tonnes, up 4.4 times. In particular, catfish and shrimp have become national strategic products.
 
Transport infrastructure has been gradually upgraded, facilitating inter – regional traffic, contributing to a rapidly changing the face of urban and rural areas and areas of ethnic minority groups, initially satisfying investment demand, development and social security. For the last 10 years, the Mekong River Delta has built up over 10 new highways stretching 2,500 km; nearly 70 provincial roads, built up new 9,117 km, improved 23,218 km roads of various types; constructed 11,453 bridges connecting highways systems. The transportation system, airports and seaports on the island of Phu Quoc (Kien Giang) have been being constructed to better meet the requirements of national development and security. Convenient traffic infrastructure creates resilient economic development, therefore improves quality of life, especially in areas of ethnic minority groups. Nowadays, in the land of dragons, many rural areas have developed into new urban agricultural areas, contributing to economic development, and stabilising the life of 132,371 households.
 
Poverty rate of only 7.32 percent
Along with economic developments, the Mekong River Delta has also obtained many achievements in cultural – social activities, of which education and training are one of breakthroughs of the region. Over a decade, the Mekong River Delta has established, expanded and improved many universities, colleges, vocational schools, and especially, the University of Can Tho has become a focal point of the region. All provinces with large numbers of Khmer people have boarding schools. There are currently 26 schools with 7,500 pupils that account for 10.27 percent of pupils of ethnic minority groups studying in high schools. Health and health care for people in the nation’s granary have also gained important achievements; the medical network in the region has been improved and developed.
 
In addition, cultural – social activities have been organised in various forms, with abundant and practical contents that attract many participants. Gratitude work, poverty reduction activities, social security are timely addressed. 332,000 jobs are created a year. The proportion of people having access to safe water is over 87 percent. Poverty in the region has sharply fallen, from 14.18 percent at the end of 2000 to 7.32 percent (according to poverty standards in 2006 – 2010). Through promotion activities, many localities such as Hau Giang, Tra Vinh, Ca Mau, An Giang, Dong Thap, Ben Tre and Kien Giang have gathered thousands of billion VND from the community to address social security issues.
 
The Mekong River Delta has one centrally governed province, 10 cities and 4 towns. Can Tho city has been upgraded to first class urban area, and plays the role of economic, cultural, scientific and technological centre of the whole region. Can Tho cable-stayed bridge over the Hau river, connecting Highway 1A, has become the most vivid symbol of achievement of 10 – year implementation of Resolution 21 in the key food product centre of the whole country.
The necessity of long term strategic policies
After 10 years of implementing Resolution 21, despite significant achievements, the development of the Mekong River Delta still contains many instable factors and the whole region has to face many challenges.
 
Agriculture, farmers and rural areas (Trio – agriculture) in the Mekong River Delta have made much progress and an important contribution to the national economy (27 percent of GDP), however when reviewing its developments, the region still causes many concerns. Dr Le Van Banh, Director of Rice Institute of the Mekong River Delta, said that recent research has shown that the development of the Mekong River Delta is not sustainable because while agricultural production and exports increase rapidly, household incomes do not increase at the same rate, making the wealth gap larger. Moreover, obstacles of trio-agricultural developments have been identified, namely technological obstacles, food sanitary and safety issues; challenges of developing potentials and advantages overcoming the lack of inter – regional connection; non-comprehensive investment; inter-regional connection and “ 4 - object” participation are still loose when regional challenges are addressed…
 
Other challenges of the Mekong River Delta are small industrial scale with low added value, mainly local industry. The number of small and medium sized enterprises account for 80 percent of total enterprises in the region. The competitiveness of regional industry is very limited, moreover equipment and technology are out of date, productivity is low, product quality is not satisfactory, and intermediate costs are still high.
 
Along with difficult life, limited economic development, the people of the Mekong River Delta also have to face environmental problems, especially the impacts of global climate change, and the Mekong River Delta is identified as one of the most severely affected regions in Vietnam. In particular, the region of the Mekong River Delta basin is the most alarming case affected by natural disasters in Southeast Asia. Floods, droughts, and salinity intrusions occur frequently, directly affecting the lives of 20 million people in the largest granary in the country.
 
Shortcomings, weaknesses and challenges have directly affected the life of people of the Mekong River Delta. Therefore, after 10 year implementation of Resolution 21, although people’s lives have improved, the improvement is not proportional with regional potential, and the region will probably be left behind by other regions without long term strategic policies and timely support of the Government. If those requirements are satisfied, in the next period the Mekong River Delta will surely “fly high” at high speed and more strongly compared to the last decade, confidently raising to participate in the economic development of the whole country.








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