According to the Government Office, the Prime Minister permitted Ministry of Planning and Investment (MPI), Central Highlands Steering Committee and Dak Lak People’s Committee to organize a forum to promote investments in Central Highlands.
120 projects worth VND100,000 bln
Investment promotion forum in Central Highlands is of national level and organized when the economy starts good signs after the recession. The five provinces of the Central Highlands have some 120 projects worth VND100,000 billion (over US$5 billion). The investment areas are mainly industry, energy, agriculture and forestry processing, trade and service, infrastructure, real estate, communication and transport, health-culture-education. The biggest demand is in Lam Dong province with VND85,000 billion (Dak Lak and Kontum VND4,000-5,000 billion, Gia Lai and Dak Nong VND2,000 billion each).
Important projects include Da Lat – Thap Cham railways (US$320 million), Bao Lam – Phan Thiet – Binh Thuan railways (US$500 million), Dau Giay – Lien Khuong highway (US$600 million) and in particular new urban area Lien Khuong – Prenn (US$3 billion).
Beyond capital
The Central Highlands has maintained a growth rate of over 10 % since 2001, double that of Vietnam in some years. However, according to Mr. Mai Van Nam, Deputy Head of the Steering Committee, the Central Highlands remains a difficult region and fails to match the potentials of the region.
According to MPI Vice Minister Nguyen Bich Dat, though with high growth rate, the Highland economy is not stable. Agriculture and forestry account for major part of GDP but forestry development remain complicated, forestry products less competitive and export limited.
The Central Highlands accounts for only 1.4 % of projects and 0.5 % of investment capital of Vietnam. In 2008, when Vietnam attracted US$70 billion of FDI and the 7 first months of 2009 over US$10 billion, the Highlands got nothing from this growth, Mr, Dat said.
According to Mr. Dat, the Highlands needs VND35,000-40,000 billion for development. The State budget can ensure only 35 %, while 65 % must be mobilized from other sources such as ODA, FDI and domestic capital.
However, the problem is not only the capital. Chairman Nguyen Van An of Thai Hoa group, main exporter of Vietnamese coffee bean, said that due to delayed collateral for credit, Thai Hoa instant coffee processing factory had to postpone the production until 2011.
According to Mr. An, capital mobilization is not difficult, especially in case of his company, as many financial institutions are ready to lend but it needs collateral from strong banks. And it is the biggest barrier to enterprises and capital resources. It slows down the process and changes the objective of business strategy.
Meanwhile Mr. Hoa believes that the added value of agricultural produce in the Highlands must be considered as the driving force of the economic growth of the region. Presently, the selling of semi-processed products reduces 35 % of the value.
For his part, Mr. Duong Van Hoa, Deputy Director General of Vinacomin, said that there remain several constraints to investment in the Highlands such as land clearance, poor infrastructure, weak workforce even manual labour. Two road networks are too narrow and downgraded causing big problem for transport. The complicated land ownership delays the land clearance and compensation. The delay of some months causes the loss in high banking interest for Vinacomin projects of several thousand VND.
In addition, there are few workers of ethnic minorities, Vinacomin has to support 11 local students for training abroad.
As a matter of fact, apart from capital, much to be done to attract investors to the Central Highlands of great potentials.
The Central Highlands consists of five provinces (Kontum, Gia Lai, Dak Lak, Dak Nong and Lam Dong) with an area of 54,700 sq.kilometres, (16.5 % of Vietnamese territory), population of over 4.9 million people (5.8 % of Vietnamese population). The land is fertile with over 2 million hectares of bazal soil most favourable for planting coffee, rubber, pepper. The region is also rich in minerals. Bauxite deposit is among the biggest in the world with 6-7 billion tonnes and under national development plan.
Kim Phuong
Vietnamese
