Mekong Delta Investment and Development Conference: Challenges Still Ahead

The Mekong Delta Investment and Development Conference closed successfully on September 6 with deals signed for 10 projects in eight areas, including many national scale ones aimed to develop the Mekong Delta into a hub of rice, seafood and fruits. However, the region is still facing difficulties on the track of economic development, experts said at the conference.

 

Much potential to be tapped Analysing the potential and competitive advantages of the Mekong Delta, Lieutenant General Luu Phuoc Luong, Deputy Head of the Southeast Steering Committee, said “Agriculture remains the outstanding advantage of the region. Therefore, investment into agriculture, warehouse systems, seaports and agricultural product consumption should be paid attention to, particularly for rice production, tra and basa fish breeding, fruit cultivation and husbandry.” The Southwest Steering Committee has cooperated with the Ministry of Planning and Investment (MPI) and Mekong Delta cities and provinces to propose special policies to attract investments into these areas to seek the prime minister’s approval.

 

Minister of Planning and Investment Vo Hong Phuc talked about regional planning and policies to draw investment from now to 2020. Phuc added that the Mekong Delta is the fourth biggest economic region of Vietnam. According to statistics from the MPI, the region gained an average GDP growth between 10 and 12 per cent from 2006 to 2010. The figure was estimated at 6.8 per cent in the first half of this year. Local per capita income has reached VND17.8 million so far this year. Total trade turnover since early this year was estimated at US$6.2 billion. Currently, the Mekong Delta accounts for 18 per cent of the national GDP, 50 per cent of rice productivity, 70 per cent of fruit output, over 52 per cent of aquatic output, 90 per cent of exported rice and nearly 60 per cent of the country’s trade turnover. These have made great contributions to regional development and Vietnam in general. However, the region still faces challenges in luring investments due to weak infrastructure and the shortage of qualified labourers. The region now has 530 foreign direct investment (FDI) projects totalling US$9.2 billion, with 35 per cent of this disbursed. In the first seven months of this year, the region licensed 51 FDI projects with a total registered capital of US$1.49 billion.

 

Can Tho City, which tops the region in advantages for economic development, has not yet been active enough for regional cooperation, said Chairman of the municipal People’s Committee Tran Thanh Manh. In the coming time, the city will further join hands with other cities and provinces to fight against climate change and promote hi-tech agricultural development as well as transport, education and healthcare services.

 

Answering questions on the Mekong Delta region’s weak infrastructure system, Deputy Minister of Transport Ngo Duc Thanh mentioned the latest information about the regional transport infrastructure development plan from 2010 to 2020 and a vision until 2030. Under the plan, the Mekong Delta will invest to build five main road routes linking Can Tho, seaports, airports, Ho Chi Minh City and nine other roads for regional connection. The Mekong Delta will be the region of first priority in Vietnam for building “four-lane roads” to meet the increasing transport demand.

 

Much needs to be done Regarding “regional cooperation”, the World Bank Country Director in Vietnam said that the Mekong Delta has licensed 577 FDI projects capitalised at US$8 billion, drawing participants’ attention. V. Kwakwa added that the figure was too modest for a region known as Vietnam’s hub of rice, seafood and fruit. She also noted the necessity to create favourable conditions for the private economic sector to raise the quality and value of goods.

 

The WB official urged the Vietnamese government to improve the local business environment; ensure the macro-economic situation; speed up infrastructure development; simplify administrative procedures and facilitate business environment between the state and non-state sector.

 

Dr Doan Duy Khuong, Vice Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) highlighted the importance of raising national competitiveness through boosting the industrial chain connection. Khuong added that a developed country must have the comprehensive development of airports, roads, railways, metros and waterways. “Along with the government’s consistent policies, enterprises should join hands for community benefit, forming an industry connection. The relation between VCCI and industry associations as well as localities proves a positive signal”, he noted.

Chairman of Asian region of the US’s Cartepillar Group, Kevin Thieneman, said “Underdeveloped infrastructure is the major barrier to investment inflow into Vietnam”. Vietnam needs to pour a total US$150 billion into infrastructure development from 2009 to 2011. The ASEAN-US Business Council has inked a memorandum of understanding (MoU) with the Vietnamese Ministry of Planning and Investment to facilitate the US investment into the country. Under the MoU, Caterpillar will provide solutions to help raise effectiveness of Vietnamese infrastructure projects such as expressways.

 

Vice Chairman of the European Chamber of Commerce (EuroCham) Ashok Sud showed his concerned on both domestic and foreign businesses’ complaint to do business in the Mekong Delta. In a speech named “Investing into the Mekong Delta, a new method of access to the European business community”, Ashok Sud said the EuroCham works as a group which comprises 600 affiliates. To draw investments from this channel, the Mekong Delta should issue specific plans on economic growth and focus on sectors for sustainable development. Localities should introduce a strategic plan, defining their competitive advantages. The EuroCham will play a vital role in relationship with the Mekong Delta authority to achieve this goal.

 

Ten projects inked at the conference are in the areas of infrastructure construction, energy, tourism, the construction of residential areas and industrial parks, trade, services, aquatic processing and education.

 

Six out of these projects are in the realty sector totalling US$146.61 million, accounting for 16.16 per cent of the total pledged capital at the event. Bac Lieu Province attracted four projects capitalised at US$64.3 million, Tra Vinh with one project and Vinh Long with one project.

 

At the gathering, the Bac Lieu People’s Committee signed a deal for a 99MW wind power project worth VND4.5 trillion with Cong Ly Construction-Trade-Tourism Company. The province also inked several deals with Hoang Quan Realty Company which will build a VND70-billion residential area, a VND60-billion housing project for low-income people and a VND120-billion trade-service complex.

 

The four remaining projects are a US$231.23 million wind power plant, a US$500 million fibre and supporting industrial park, Huy Thuan aquatic processing factory worth US$14.12 million and a finance and banking university worth US$15.39 million.

 

At the conference, Ho Chi Minh City Foreign Trade & Investment Development JSC and the Bac Lieu People’s Committee inked a MoU on investment cooperation. Under the MoU, Fideco pledged to build Bac Lieu coastal eco-tourism resort and upgrade Bac Lieu bird garden to an area of 495 ha (the 165-ha resort and the 130-ha garden) at a total capital of VND1 trillion.