Cau Treo Border Gate Economic Zone in Ha Tinh province is a driving force to enhance efficiency in Vietnam - Laos economic cooperation, step up regional economic cooperation, attract investment capital, and build mountainous urban zones. However, the economic zone is encountering numerous difficulties in raising funds for essential infrastructure development. Vietnam Business Forum interviews Mr Tran Bau Ha, Director of Cau Treo Border Gate Economic Zone Authority, on solutions to this problem. Phan Quang and Duc Long report.
Plentiful advantages except capital
How do investors in Cau Treo Border Gate Economic Zone look to central Laos and northeast Thailand markets? What do they benefit from these markets?
It is very easy for businesses to reach central Laos and northeast Thailand from Cau Treo. National Road 8 is the most favourable route to Laos and northeast Thailand. The completed Khammouan Bridge shortened the distance to 80 km from Thakhek to Lac Xao. Thakhek is relatively developed. Nakhon Phanom Province in the northeast of Thailand is looking to open to the sea and the distance from it to Vung Ang Port is nearer than to the seaports in Bangkok region. This province also has the biggest number of Vietnamese people in Thailand - a good chance for Vietnamese people to do business.
The second advantage is that Cau Treo Border Gate Economic Zone is one of nine border gates where the Government advocates investment preferences. Decree 162 issued a series of economic and planning preference policies. Accordingly, investment projects in the economic zone will receive the highest incentives applied to areas of socioeconomic difficulties, including tax, credit and land incentives. This is a multi-industry economic zone designed for industry, tourism, trade, urban, agriculture and forestry. Finally, the investment environment in Ha Tinh province is now very good. These are advantages for Cau Treo Border Gate Economic Zone to draw investment capital and for enterprises when they do business here.
Why is Cau Treo Border Gate Economic Zone short of investment capital?
Since Decree 162 took effect, Cau Treo Border Gate Economic Zone has received just VND300 billion while it needs VND2,000 billion, or at least VND1,500 billion, for essential infrastructure from now till 2013 (according to decision 961/QD-TTg.) Capital shortage leads to insufficient infrastructure. Many investors came but they did not decide to do business here because of inadequate infrastructure. The economic zone needs some VND1,500 billion to complete ongoing projects. Section B needs at least VND200 billion to open to investors, but it has mobilised just VND100 billion. This is a daunting challenge.
So, we need a solution?
First of all we need to utilise all central and provincial capital sources and BOT (build - operate - transfer) projects. Currently, the economic zone is cashing in on ODA capital. Secondly, we need to work with ministries, departments and localities to resolve difficulties and challenges. As a special economic zone, it usually causes a lot of new difficulties for both investors and authorities when it is in operation. Besides, the rational use of land fund has formed a spacious urban zone. This helps the economic zone reduce initial capital investment.
Cau Treo also needs to develop human resource. This is actually a thorny dilemma. An investor planned to invest in solar cell production factories for export to Europe and North America, but had to cancel that because of no available workforce.
Not developing at all costs
Could you tell the link between Cau Treo and Vung Ang economic zones?
Cau Treo is a goods transhipment point between Vung Ang with central Laos and northeast Thailand and vice versa. The closest aspect is merchandising. The two economic zones must work together to know whether a project is suitable for Vung Ang or Cau Treo. It is not wise to develop heavy industries in Cau Treo as Vung Ang is a better location for them. Cau Treo is more suitable for light industries using a small workforce. Sometimes, we introduce investors working with us to Vung Ang and it also introduces other suitable investors to us.
How is public involvement in the economic zone development?
Cau Treo Border Gate Economic Zone makes up over half of Huong Son district and public involvement in the economic zone development is apparent.
We cannot develop Cau Treo Border Gate Economic Zone at any cost. We must place it in the general economic picture of the development of Ha Tinh, friendship relations between Vietnam and Laos, and benefits for local people.
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