Lao Cai province is considered a conducive business and investment environment, particularly in recent years. To learn more about the province’s efforts for that outcome, Vietnam Business Forum has an interview with Mr Dang Xuan Phong, Director of Department of Planning and Investment of Lao Cai province. Tran Trang reports.
Could you tell us about the outstanding results of investment attraction in Lao Cai province?
Social investment capital in Lao Cai totalled VND25 trillion in 2006 - 2010, nearly four times higher than in 2001 - 2005. In 2011 alone, the value exceeded VND10 trillion, up 40 percent over 2010. There has been major change in investment capital structure in Lao Cai, featuring a decreasing proportion of state budget, with 56 percent in the 2001 - 2005 period, 48 percent in the 2006 - 2010 period, and only 26 percent in 2011 (the remainder of 74 percent was offset by non-State budget). By the end of the first quarter of 2012, the province had 370 Vietnamese-invested projects capitalised at VND42 trillion and 31 foreign-invested projects worth US$520.3 million. Large-scale projects focused on major local strengths and potentials. Typical examples include No. 2 DAP fertiliser factory with annual output of 330,000 tonnes, Lao Cai bronze smelter with annual capacity of 10,000 tonnes, and Lao Cai steel and iron mill with yearly output of 500,000 tonnes which is estimated to generate revenue of over VND6,000 billion a year.
The effective attraction, management and use of domestic and foreign investment capital is an important driving force to maintain high and sustainable economic growth. Specifically, GDP growth averaged 13 percent a year in the 2006 - 2010 period and 14.2 percent in 2011 alone. Total local budget revenues reached VND3,157 billion in 2011, up 59 percent year on year.
In the context of the global economic downturn, many investment projects are being carried out behind schedule. What has Lao Cai done to limit delays in such cases?
In the past years, the government of Lao Cai has directed concerned agencies to perform regular reviews on investment projects to identify the causes affecting the project progress and adopt the best solutions in time to address existing difficulties.
The group of solutions concerning problems in site clearance and land compensation: Lao Cai always publicises land planning and land fund information to facilitate investors to access information about land resources. The province requires that all projects be based on current planning and keep abreast of social and economic development planning. Detailed construction planning is the foundation to establish, examine and approve project documents. Besides, the province flexibly applies land mechanisms and policies to facilitate site clearance on the basis of harmonising the interests of the State, people and businesses. The province has built a professional team in charge of site clearance and land compensation which settles land disputes in a timely manner and resolutely revokes ineffective investment projects in favour of investors with highly feasible projects.
The group of solutions to deal with financial difficulties: The province holds an annual meeting with commercial banks to exchange information and seek solutions to troubleshoot capital difficulties facing investment projects. Capital is provided for key projects, agricultural and rural development projects, small and medium enterprises, supporting industries, and export-oriented production projects. Lao Cai also encourages enterprises to join investment promotion activities to seek investment opportunities and business partners with powerful financial capacity to work together to implement projects. In addition, the province expands bilateral cooperation with large credit institutions like the Vietnam Bank for Investment and Development (BIDV), the Vietnam Development Bank (VDB), the Vietnam Technological and Commercial Joint Stock Bank (Techcombank), and others, to provide loans for businesses.
The group of solutions to public administration and policy reform: Lao Cai always boosts innovation, openness and transparency of State policies in support of businesses. The province also constantly updates, reviews and flexibly applies preferential policies in favour of enterprises, while continuing to revise and amend regulations and administrative procedures, and provide public licensing services online (i.e. business licence granting, planning certificate granting, construction permit granting, etc.) to create a modern, one-stop public service system to reduce costs for businesses.
The group of other solutions: The province regularly reviews and steps up project implementation progress; encourages enterprises to promote dynamism, creativity and innovation to strengthen business capacity, boost production, and take care of their workers; and implements human resources development planning in the 2011 - 2020 period to meet the needs of enterprises.
To advise the Provincial People's Committee on investment attraction, how has the Department of Planning and Investment of Lao Cai province endeavoured to reform administrative procedures to provide most favourable conditions for investors?
As part of a series of business support activities, administrative procedure reform is particularly valued and promoted. Specifically, the department participated in the Provincial Task Force 30 to review and streamline its administrative procedures; and established specialised divisions to receive and examine documents submitted by businesses, make appointments, and return documents to them. The department also set up the Business Support Office, and joined the Business Support Unit in charge of investment administrative procedures to stay aware of difficulties facing investors. The department also proactively posts investment information like industrial zone planning, investment incentives, and socioeconomic development orientation, on the province’s electronic information portal and its website.
In 2011, the department successfully built the website
www.pcilaocai.vn, the first such provincially based website in the country, to provide an accurate local scientific, comparative PCI database system for agencies, businesses and people to learn about the province’s PCI (provincial competitiveness index). This will help the province improve its investment environment, and enhance publicity and transparency in public administration.
Efforts for administrative procedure reform boosted the efficiency of the Provincial People’s Committee on business support activities. In 2011, the department granted new establishment licences to 266 enterprises, 28 branches and representative offices, and 30 business units. The time required to complete licensing procedures was shortened to only 03 days on average (compared with the maximum five days specified by the regulations). The department advised the Provincial People’s Committee to grant new licences to and adjust licences for 97 domestic investment projects capitalised at VND4,152 billion, and investment licences to four new FDI projects capitalised at nearly US$28 million. These efforts were felt by the business community and reflected in the low market entry cost index (a component of PCI). Especially in 2011, the index was 9.41 points, ranking first in the country.
Lao Cai province’s first rank PCI in 2010 and 2011 reflected the efforts of all levels and branches in the province. What measures will Lao Cai adopt to create a favourable investment and business environment?
The results of the annual PCI announced by the Vietnam Chamber of Commerce and Industry (VCCI) are always seen as a gauge for Lao Cai to know about itself to further perfect its investment and business environment. In the past years, component indices of Lao Cai province’s PCI always stand in the first place in the country. This is an honour, but it is also poses challenges for the province to maintain this in the following years.
Nonetheless, some component indices are still low and slow to improve. Therefore, in order to maintain the PCI in the future, Lao Cai must focus on the following measures:
Maintaining and developing effective relationships and interactions between the provincial government and the business community under the principle of “Businesses thrive, Lao Cai develops";
Constantly innovating and improving the dialogue capacity of the provincial government with the business community and the people;
Enhancing publicity and transparency in administering and carrying out socioeconomic development objectives;
Popularising and raising awareness and accountability of civil servants and State employees in business support;
Improving the quality of public support services; actively coordinating with central authorities and localities to upgrade infrastructure, especially Noi Bai - Lao Cai highway and Yen Vien - Lao Cai railway;
Boosting human resource training and development, stepping up public administrative reform, and enhancing the efficiency of addressing land-related issues.
Vietnamese
