Economic Driving Force

The Ministry of Planning and Investment said IPs, EPZs and EZs set up and developed over the past 20 years are associated with the cause of national economic reform and opening up, aiming to realise industry-driven growth investment attraction policies and restructure economy towards industrialisation and modernisation. As of December 2011, Vietnam had 283 IPs covering 76,000 ha in 58 provinces and cities nationwide. IPs and EPZs have to date attracted the 4,113 effective foreign direct investment (FDI) projects with a total registered capital of US$59.6 billion. If Vietnamese-invested projects are included, the value amounts to US$80 billion. According to the ministry, FDI attracted into IPs and EPZs in Vietnam account for 35 - 40 percent of registered FDI capital licensed in the country. Remarkably, the industrial sector takes up more than 80 percent.

 

According to statistics, a ha of leased land in IPs and EPZs generated industrial production value of US$2 million, export revenue of US$1.27 million, and taxes of VND1.38 billion a year. Industrial production and export rates here are higher than the national averages. IPs and EPZs have also created jobs, trained working skills and increase incomes for Vietnamese people. By the end of 2011, IPs and EPZs generated jobs for more than 1.7 million people, an average of 77 workers on hectare.

However, many attendants to the meeting frankly pointed out major shortcomings in planning, management and development policies from central to local levels. Many provinces and cities only pay attention to setting up IPs and EPZs while making light of planning and managing them. As a result, many IPs and EPZs are unattractive to investors. As regards administrative management, Mr Vu Van Thai, an official from the Ministry of Home Affairs, said there are a lot of shortcomings in IP, EPZ and EZ management decentralisation. For instance, the industrial zone management board is not allowed to set up an inspectorate while its operating charter requires it. Therefore, when disputes and litigations arise, the industrial zone management board has to seek assistance of inspectorates in other agencies. This reduces the flexibility of administrative orders, takes time and costs, and causes procedural overlapping. While IPs, EPZs and EZs are assigned to the Ministry of Planning and Investment for management, smaller district-level industrial complexes are managed by the Ministry of Industry and Trade. This decentralisation caused overlapping of functions and tasks of State management agencies.

 

Deputy Prime Minister Hoang Trung Hai noted that the IP and EPZ establishment and development policies are right while admitting that there are some shortcomings in bringing them to life because of inconsistent development policies. The Government of Vietnam is determined to lease 70 percent of rentable areas in IPs, EPZs and EZs by 2015, increase the contribution ratio of IPs and EPZs, EZs to in GDP, and generate high export value, he added.

 

With right policies and drastic actions of central and local authorities, IPs, EPZs and EZs will play a greater role in national socioeconomic development in the new era and contributes to realising the target of turning Vietnam into a basically industrialised nation by 2020.

 

To build a sustainable IP and EPZ and EZ development strategy, Ho Chi Minh City proposes the Ministry of Construction to study and create more favourable mechanisms for implementing the Decree 66 on social infrastructure construction at the service of workers. As 70 percent of the city’s workforce is migrant workers (from other provinces and cities), the housing demand is huge. In addition, State management agencies need to support the development of ancillary industries to serve the development of IPs and EPZs. Presently, there are some unclear definitions to powers, functions and tasks of IPs, EPZs and EZs. The city also plans to build specialised IPs, hi-tech parks, etc in the coming time.

 

As many investors need foreign currencies to settle payments, the State needs facilitate them to access capital sources at stable, reasonable interest rates. Besides, some legal regulations on industrial zones need to be further completed. It will be great to have the Law on IPs, EPZs and EZs. The positions of the IP, EPZ and EZ management board need to be clearly defined in the State administrative system to bring the one-door administrative mechanism into full play.

 

In my opinion, a modern, synchronous, high-quality infrastructure is the most important factor to attract investors. Investors need to be provided best services and utilities. IPs should consider matters of investors as their own ones.