Danang Industrial and Export Processing Zones have attained notable achievements in attracting investment. Regarding this topic, Vietnam Business Forum had an interview with Mr Thai Ba Canh, Director of the Danang Industrial and Export Processing Zones Authority. Hoang Minh reports.
How well has Danang fared in terms of attracting foreign direct investment (FDI) into Danang Industrial Zones?
As of June 2012, the Industrial Zones had attracted 347 investment projects, in which 270 of them belong to local businesses with the total registered invested capital of VND11,498.69 billion, and 76 FDI projects from 13 different countries and regions with the total registered invested capital of US$691.94 million.
Especially during 2011 and early 2012, despite the impacts from the global economic crisis, European debt crisis and fierce competition from other countries in ASEAN and Asia, attracting FDI into Industrial Zones in the first six months of 2012 still maintained an acceptable growth rate, with three new projects and an addition of US$14.716 million in total registered capital, up 278 percent compared to the same period in 2011; eight projects being expanded to accommodate increased production scale, technological advancement and product quality improvement. The supplemental registered capital is US$106.54 million, up 269.72 percent compared to the same period in 2011.
Danang Industrial Zones are 85.77 percent leased, higher than the national average of 60 percent, according to December 2011 statistics from the Ministry of Planning and Investment. Danang Industrial Zones were the first to reach maximum capacity among industrial zones all over the country (eight years from the establishment date).
What comparative advantages does Danang possess over other cities and provinces and what kind of investment attracting policies are we talking about?
Danang Industrial Zones have an advantageous location for production and business. The development planning of Danang industrial zones has been in line with the Development Planning of Industrial Zones in Vietnam during the 2015-2020 period ratified by the Prime Minister; the proportion of reclaimed agricultural land used to develop the industrial zone is very low (1.2 percent of 1,141.82 ha) and the reclaimed areas only include infertile an low-yielding land. This lends evidence to the fact that the planning and development of Danang industrial zones ensure sustainability and stability in compliance with the Government's guidelines.
At the same time, the technical and social infrastructure receives attention from both the Government and the society. Responsible government offices have issued guidelines to enable investors to complete projects in line with international standards, satisfying the socioeconomic development and global integration process.
Technical infrastructure in these industrial zones is developed by infrastructure development companies (major investors in the industrial zones) soon after the detailed planning draft of the industrial zones is ratified. At the moment, the technical infrastructure has been developed in a comprehensive and modern way, complying with the ratified detailed plan of the industrial zones regarding transportation, electricity and water network, rainwater and sewage water overflow network, and post office and telecommunication network, satisfying investors' demand. Moreover, the industrial zones set aside a "clean" land area (20-30 ha) with complete infrastructure to attract new investments.
Danang has established a friendly, transparent and efficient business environment for investors. Together with fine-tuning the mechanisms and investment policies of state-owned industrial zones, effort has been made to streamline administrative formalities at the Management Board towards a more open, transparent, straight-forward and convenient mechanism, with the motto "One door, One management node." Administrative procedures for investment and real estate are directly and quickly briefed so that investors can easily access the best investment method and location to execute their investment plans. Investors can also obtain more information from the website of the Management Board and investors of the industrial zones. The cooperation between the Authority and investors has contributed to Danang securing the top position for the Provincial Competitiveness Index (PCI) for three consecutive years, which firmly asserts Danang's capability and reputation in attracting foreign investment.
Going forward, what do you think are the necessary steps to attract more investments and develop industrial zones?
The development orientation of the industrial zones in the near future continues to adhere to Action Program 16-CTr/TU initiated by the City Committee regarding the implementation of Resolution 33-NQ/TW ratified by the Politburo about "Building and Developing Danang in the industrialisation and modernisation era" and that "Danang will become a leading province in industrialisation and modernisation, and fundamentally become an industrial city by 2020”; Decision 1866/QD-TTg dated October 08, 2010 ratified by the Prime Minister regarding the socioeconomic development of Danang City until 2020; and Decision 23/2011/ NQ-HDND issued by the People Committee of Danang, regarding the orientation and goals in 2012 in order to set the specific targets and goals in managing and developing Danang industrial zones in the 2012-2015 and 2015-2020 period.
Also through reports, the Conference proposes that Government, Central Ministries and Departments should have open, breakthrough policies in place so that Danang and other central coastal provinces can attract investments into core projects, boosting the pace of development, especially transportation infrastructure connecting Danang, core economic regions in the central region (industrial zones in particular) with ASEAN countries and other parts of the world. The transportation infrastructure includes the harbour, Danang International Airport, Highway systems, and the East-West Economic Corridor.
In addition, there should be a concerted effort to cooperate with local governmental and departmental offices in the "Attracting Investment outside of the Industrial Zones Project" in order to improve infrastructure within these industrial zones, especially rainwater and sewage water overflow systems, flood prevention systems and the "Planning and Determining the Sewage Dumping areas behind the Sewage Treatment Centre in the Industrial Zones" project.
With the current rate of investment, it is expected that the industrial zones will soon reach maximum capacity. Therefore, there is an urgent need to facilitate procedures to ratify the Hoa Khuong Industrial Zone at the earliest possible time in order to set aside a "clean" land area to attract more investments in the near future.
Finally, the investing environment should be friendlier to investors; the human resources quality should be improved; the economic mechanisms should be shifted towards a more suitable model; social security activities in the industrial zones should be encouraged; and investors should be reminded about the completion deadline of infrastructure according to the approved plan. This helps create momentum to attract more investment in the industrial zones in the near future.
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