Saying No to Poorly Planned IZ Development

In essence, investing and operating IZs and EPZs and EZs are the same as other business sectors. Infrastructure investors have to depend heavily on market developments and global economic situations. Hence, in 2011, very few new IZs were established. But, according to statistics, investment into existing industrial zones is higher than previous years, said Mr Vu Dai Thang.

 

In the past 20 years, Vietnam has had much change in the legal system and investment laws. Currently, incentives in industrial zones are not as many as previously. This is also an obstacle in attracting investors into industrial parks and infrastructure developers to invest more. Besides, according to the laws, industrial parks must have waste and wastewater collection and treatment systems. Nonetheless, some industrial zones have substandard environmental protection because of the diversity of operating projects there. In addition, labour issues are prickly as industrial parks are located in certain places where the density of workers is very high. This results in numerous problems relating to housing, healthcare and offspring care, etc.

 

This difficulty stems from the lack of consistency and stability in industrial park development. Currently, new companies in IZs are no longer granted preferential corporate income tax and import duty except for determined hard locations. This is distressing investors. Preferential policies for fresh investment projects and expanded plans have huge effect on investment decisions of businesses, especially world-renowned investors which have intention to invest or expand operations in Vietnam.

 

Currently, about 1.7 million workers are employed in nearly 280 industrial parks across the country. In the future, ensuring living conditions of labourers are prioritised rather than attract more projects. Another weighted orientation is the focus on attracting industries with high content of grey matter, advanced and green technologies.

The industrial zone planning necessitates the guarantee of certain conditions like location, infrastructure, economic development trends, and labour supply. When IZs are located, they will be put on the interrelation with consumption markets and input supply markets. As regards human resources, localities must have human resource development and training plans to improve capacity of workers. The State must have mechanisms to support localities and enterprises to develop human resources, not let enterprises train their employees alone.

 

In addition, authority is necessarily decentralised to IZ management boards, enabling them to apply the single-window administrative mechanism. Investment incentives and preferential income tax for companies investing in industrial zones in hard areas need to be consistent and clear enough. High-quality projects e.g. pursuing sustainable development or producing locally competitive products need to be encouraged. Infrastructure inside and outside IZs need to be synchronously built, particularly housing for labourers.

 

We have proposed the Government halt the transformation of industrial complexes into industrial zones because of insufficient control and supervision. This measure is deemed necessary to have a comprehensive review and assessment on operations of IZs and EZs. We will also consider measure to deal with inactive or ineffective IZs and EZs.