Hanoi has applied many favourable mechanisms to attract investment projects and achieved positive results. To learn more about this issue, Vietnam Business Forum Magazine has an interview with Mr Ngo Van Quy, Director of Hanoi Department of Planning and Investment.
Could you tell some remarkable investment attraction results Hanoi has made in recent years?
Hanoi attracted US$19.4 billion of foreign direct investment (FDI) capital with 2,207 projects from 1989 to 2011. 2008 was the best performing year with US$5 billion. In 2011, the capital city attracted 285 projects with a total registered investment capital of US$825.7 million. As foreign projects were mainly registered in service and industrial sectors, they have strong impacts on economic restructuring. This development suits and reflects State guidelines, policies and plans on industrialisation.
Currently, more than 40 countries and territories in the world have investment in Hanoi. A majority of investors are multinational and transnational corporations with global business networks. Therefore, apart from attracting their capital, Hanoi also has favourable conditions to reach and penetrate into international markets and expand export markets. Investors have given a new face to the capital city, and helped it boost international economic relations and raise the profile on the world arena.
However, investment disbursement only has to date accounted for just 40 percent of registered value because many investors want to take a slot to keep advantage although their financial capacity is limited or they face difficulty in raising funds due to economic crisis.
In the current context of economic difficulties, many projects are behind schedule, especially real estate projects. Does Hanoi have any solutions to deal with this situation?
Most big real estate projects in Hanoi are behindhand except for small ones because of difficulties in site clearance, finance and investment adjustments in progress.
To cope with this situation in the context of economic recession, the city is stepping up management and selection of projects and is resolutely revoking investment permits of incapable investors. In case investors have many projects, they necessarily focus on more feasible ones. The city is also considering allowing investors to raise funds from alternative sources of capital like issuing shares, bonds or launching partnerships, etc.
In addition, Hanoi will focus on speeding up site clearance and resolving complaints about land valuation. Investors will be requested to strictly follow reporting mechanism to help the city make regulatory policies.
Would you mind revealing orientations of investment attraction in the coming time?
As regards the general direction, the city will resolve three tasks at the same time: (1) quickly develop economy to create strong motivation and impact on regional and national economic development; (2) develop sustainably and ensure political stability, social order and safety, the healthiness of cultural and ecological environment; and (3) effectively develop economic, social and environmental aspects, consider general and long-term efficiency a dominant on specific and short-term one. Hanoi is determined to perform its roles as the centre of politics, culture, science and technology for the nation as well as the nucleus of economic development of the northern economic zone and all northern provinces as a whole. To have effective development, Hanoi must base on science, technology, education, training and a knowledge-based economy. Hence, it will give priority to modernisation goals, improve development quality, and carry out sustainable development objectives. It will encourage investment for modern technological innovation and application and in-depth development while taking initiative in international economic integration and enhancing quality, value and competitiveness of products and the economy.
With respect to the industry orientation, industrial and construction sectors will be encouraged first. It will attract investment into information technology, electronics, microelectronics, biotechnology, high technology and source technology. Concerning service sectors, it will egg on investment in health, education, training and tourism. It will selectively attract projects of “sensitive” fields like banking, finance, transportation, telecommunications, wholesale, retail and culture. With reference to agriculture and forestry, the capital city will prioritise projects concerning biotechnology, hi-tech agricultural production, high-quality seedling research and development, handicraft production, and cottage industry development.
With regard to partnership, Hanoi will target cooperation with transnational corporations (TNCs) and will encourage both directions: (1) implementing large projects and using high tech for export-oriented production; and (2) facilitating some TNCs to build research and development centres, technology incubators in association with human resource training. In the near future, the city will focus on attracting Japanese investment capital into Hoa Lac Hi-Tech Park in accordance with the agreement signed by the two governments during the visit of Vietnamese Prime Minister to Japan. It will also have investment promotion programmes with other major partners like the United States, the EU.
As an investment advisor to the Municipal People's Committee, how has the Department of Planning and Investment endeavoured to reform administrative procedures?
Administrative procedure reform is an important content in the overall public administration reform programme that the Hanoi Department of Planning and Investment is determined to carry out in the past years. Specifically, to boost information transparency, the department has publicly announced and posted administrative procedures on its website for citizens and organisations to access, study, use and particularly monitor the implementation.
To assist businesses and investors to complete administrative procedures, the department has free counselling service at its subordinates and open an online Q&A page on its website. It also regularly checks administrative procedures to remove unnecessary ones and make amendments to suit reality. The department also applied Vietnamese and international quality management standard system to its units.
Currently, to improve public service quality, the department is piloting a three-level online public service for three certificate granting procedures: Investment certificate registration for projects concerning the establishment of software production, installation solution provision, maintenance and instruction; and representative, branch operation registration certificate (only applied to non-investment branch establishment). This is a preparatory step for the e-government deployment.
The Department of Planning and Investment is working hard to create a more opening investment environment in the capital city.
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