Mekong Delta: Cooperating in Tapping Regional Potential

The regional economic potential not only brings advantages for the region itself but also for HCM City, the southeastern, central and Red River regions. Advantages of the region include its farm products and strategic geographical location, surrounded by the sea, creating high potential for marine economic development. The Mekong Delta is on the coastal economic corridor of the Greater Mekong Subregion (GMS), with easy access to Cambodia, Thailand and other countries. It is near international sea routes from Phu Quoc Island and other islands in the western region. The Mekong Delta is adjacent to HCM City and the southeastern region, the country’s big industrial hubs.

 

The economic development of the region has been long discussed, and local advantages, disadvantages and challenges have been identified. The Mekong Delta’s rice yield and export accounts for 55 per cent and 90 per cent respectively of the whole country. The yield has helped keep Vietnam the second largest rice exporter for many years. It also contributes more than 50 per cent in volume and 60 per cent in export turnover of the aquaculture sector. The region is the biggest fruit-tree cultivation area of Vietnam with 400,000 hectares, supplying 70 per cent of the country’s fruit. Many famous fruits of the region, such as Nam Roi grapefruit, Lo Ren star apple, and Hoa Loc mango have been shipped to countries around the world. Despite the advantages, the Mekong Delta is still named among areas with the lowest development in the country in terms of traffic infrastructure and human resource training. Living standards of the local people are still low, with average per capita income just 75 per cent of the national average. In response, regional economic development mainly focuses on exploiting the available potential.  

 

According to a 1999-2000 survey of the General Statistics Office, total investment in the Mekong Delta in the reviewed period was estimated at VND 38.5 trillion, making up 13.6 per cent of the whole country. Of the figure, nearly VND 11 trillion came from the state budget, accounting for 16.5 per cent of the state budget’s total spending. In the 2001-2005, 22 per cent of the state budget was allocated for the region. In recent years, the government has paid much more attention to capital allocation for the region’s key projects, such as Can Tho Bridge and Airport, Rach Mieu Bridge, Ca Mau Gas-Power-Fertilizer Complex and Saigon-Truong Luong Highway. However, most of these projects are still in progress.

 

Regarding the region’s foreign direct investment (FDI) attraction, economic experts said the FDI flow into the region is still modest due to certain obstacles. The region should map out solutions to the problem so as to attract more FDI. According to statistics, FDI attraction of the whole country in 2006 hit US$10 billion, but that of the region was only US$300 million, making up 0.3 per cent of the country. The Mekong Delta has been thirsty for investment for years. Many localities have been trying to lure investors. However, they have largely failed, as most investors are keen on HCM City and the southeastern region.

At the Mekong Delta Economic Forum 2007 held in HCM City in the middle of this year, Nguyen Thi Bich Van, vice head of the Foreign Investment Department under the Ministry of Investment and Planning, said the current investment structure and policy gives more opportunities for localities to lure investment. However, overlapping still happens due to the lack of information. Localities pay more attention to competing against than to cooperating with their neighbours. To cut risks and overlapping, localities in the Mekong Delta should tighten coordination in promoting their image and in carrying out regional investment promotion programmes based on common planning projects. With closer and more effective coordination, the Mekong Delta could be a new development centre of the country in the new era.

 

To raise the effectiveness of regional investment attraction, it is necessary to ease competition among localities, which often build strictly local socio-economic plans. Coordination among concerned agencies at central and regional levels is also very important, Van Ha Phong, vice Chairman of Kien Giang People’s Committee said.

 

According to Huynh Phong Tranh, vice head of the Steering Committee for the Southwestern Region, the committee has actively joined hands with central agencies, such as the Ministry of Investment and Planning, in supervising and building plans and policies for regional socio-economic development as well as for transport, irrigation and education development. There is also interest in the implementation of development plans for Can Tho City and key projects in the region. This coordination has brought initial achievements without overlapping among local agencies.