Dung Quat Economic Zone - Core Economic Growth Driver

The representative of the Management Board of the Dung Quat Economic Zone Authority said that the Dung Quat Economic Zone Authority has been selected by the government as one of five coastal economic zones to receive investment from the national budget. This is a good opportunity for the Dung Quat Economic Zone Authority to take advantage of the national budget to improve infrastructure, especially in the expanded area of the economic zone to create clean land to attract investment. Besides, a number of large scale projects will mark significant milestones in the period of 2013 - 2015, such as the Dung Quat Steel Plant, the Dung Quat Oil Refinery project, VSIP Quang Ngai, and Semcorp Thermal Power Plant project. This will create a good reputation concerning the investment environment in the economic zone.

 

According to the report of the Management Board of the Economic Zone, although the operation of the EZ situation in the first 6 months has not had any breakthroughs in growth, it still remains the stable growth rate to create driving forces for next development in next years. Accordingly, the value of industrial production, trade and services of the first 6 months of the year reached VND71 trillion; total exports reached US$290 million; goods through the port of Dung Quat was estimated at 8 million tonnes; the activities at the economic zone created 1,800 employees and pay taxes of VND11,700 billion.

 

In the first 6 months, the Management Board of the Dung Quat Economic Zone has welcomed many foreign business delegations to explore investment opportunities, including notably Exxon Mobil Corporation (US) and 20 Japanese business delegations, led by the Japan External Trade Organization (JETRO). Besides the promotion activities organized for the business delegation in Singapore, the Management Board has also cooperated with the VSIP to conduct a number of projects to promote investment in VSIP Quang Ngai, particularly in some areas such as footwear industry, textile and dyeing. As the results, in the first 6 months of the year, the Management Board of the Dung Quat Economic Zone Authority had granted the investment certificate for a project with a total registered capital of VND6 billion and approved the investment in three projects with a total investment of about VND20 billion. As of June 30, 2013, the Dung Quat Economic Zone Authority had granted the investment certificates for 107 projects with a total registered capital of over VND138,145 billion (approximately US$8 billion), of which there are 93 domestic projects with total registered capital of VND3,844 billion. The total value of the investment capital of the projects is estimated at US$5.8 billion, accounted for 60 percent of total registered capital.

 

However, besides the results and achievements, some challenges and shortcomings facing the investors and producers at the Dung Quat Economic Zone Authority are that a number of mechanisms and policies related to investment in the Dung Quat Economic Zone Authority have not been issued; environmental protection mechanism for some of projects in the economic zone is still problematic; the slow implementation of some projects is raising pubic concerns.

 

It can be seen that though the Dung Quat Economic Zone Authority is gradually developing, it still needs policies to create clean land to attract investment and call for promotion activities from the countries with industrial strength and to deal with the comparative advantages of the Economic Zone. This will be a true driving force for the socio - economic development of Quang Ngai in the future. Accordingly, in the future, the Management Board of the Dung Quat Economic Zone Authority continues to propose the agency to early approve the "Targeted Supports from the Revenues of the Dung Quat Oil Refinery for Quang Ngai to invest infrastructure and social security settlement in the period of 2012 - 2020 in Dung Quat Economic Zone Authority" project, issue mechanisms and policies to encourage investment for development in the Dung Quat Economic Zone Authority, and focus on attracting investment from the countries with industrial advantages in accordance with the comparative advantages of the Dung Quat Economic Zone, especially in the heavy industry and some comparative industries of the Dung Quat Economic Zone Authority, in order to reach the goals of attracting total investment of US$150 million - US$200 million and contributing total revenue of VND19 trillion to the national budget and further confirming the important role of the Dung Quat Economic Zone Authority as an economic momentum builder for Quang Ngai and the key central areas.