A new wave of FDI to flow into the central region?
19 October 2006
Central coastal provinces from Thua Thien-Hue to Khanh Hoa have developed a list of projects calling for foreign direct investment (FDI) for the 5-year period from 2006 to 2010, including about 400 projects capitalized at US$6 billion. Another list of 35 national projects capitalized at US$9billion was submitted to the Prime Minister for approval.
In the next 5 years, the central region will manage to attract around US$15 billion of FDI, which then will help to boost socio-economic development. There’s a ground for this optimistic estimation.
Besides the existence of numerous economic zones such as Chan May - Lang Co Economic Zone in Thua Thien - Hue province, Chu Lai Open Economic Zone in Quang Nam province, Dung Quat Economic Zone in Quang Ngai province and Nhon Hoi Economic Zone in Binh Dinh province, industrial zones started to show prosperity.
Vietnam's longest sea bridge linking Quy Nhon City to Nhon Hoi Economic Zone, Binh Dinh Province
Thank to this, central provinces have become home to many large-scale FDI projects. Experts forecast a new wave of FDI to flow into the central region, especially when Vietnam becomes an official member of the World Trade Organization (WTO).
The central region – a promising land
Previously, among others, poor infrastructure was considered major weakness that kept the FDI flow away from the central region. Infrastructure of the region, particularly transportation system, water and power supplies and telecommunication networks, shows remarkable improvements.
Particularly, many new seaports have come into existence, including Chan May port, Tien Sa port, Dung Quat port, Quy Nhon port…, capable of receiving ships of up to 30,000-40,000 DWT.
Apart from the Danang international airport, other airports such as Phu Bai airport in Thua Thien-Hue province, Chu Lai airport in Quang Nam province, Phu Cat airport in Binh Dinh province, Tuy Hoa airport in Phu Yen province, Cam Ranh airport in Khanh Hoa province, Pleiku airport in Gia lai province and Buon Ma Thuot airport in Dak Lak province… have established a comfortable airport network linking central provinces with the capital city of Hanoi, Ho Chi Minh city and other countries.
Universities, colleges and education centers in the region have recently experienced significant development, providing enough human resources to meet foreign investors’ demands. Natural disasters and their impacts have been controlled to minimum.
“Foreign investors started to see more investment opportunities in the regions rather than difficulties as previously”, said Le Van Dung, Director of the Center for Investment and Trade Promotion at the Dung Quat Economic Zone.
Most of them agreed that the central region, including the Central Highland, has the most diversified natural resources in Vietnam. Regarding seas, the region has rich marine resources, salt marshes, white sand mines, beautiful beaches and bays. Regarding forests, its area of forests makes up 46% total forestry area of the country, providing valuable timbers and medicinal plants.
Land resources include various minerals used in many industries, including titanium, gold… “This is a promising land for investors in all fields from industrial production to tourism, services…” said Laurence S. Aylesworth, Chairman and CEO of the world leading investment corporation Scott.
More incentives needed
According to Le Huu Quang Huy, Director of the Investment Promotion Center for the Central Region under the Ministry of Planning and Investment (MPI), from 1988 to the end of June 2006, central provinces, including the Central Highland, attracted 320 FDI projects, and capitalized at US$2.235 billion, accounting for 4.1% of investment poured into the country.
The figure was rather low, but reflected great efforts of the region. The cumulative number of FDI projects in the central region was 241 in 2004, capitalized at US$1.45 billion.
Saigon-Quynhon Hotel, venue of the Seminar on investment attraction into Vietnam's Coastal Central Region
on 21 November 2006
In 2005, the figure increased to 298 projects, capitalized at US$400 million. If expanded projects were counted, total capital would be around US$465 million. In June 2006, the number of projects was 320, capitalized at US$2.23 billion, an increase of 22 projects and US$390million excluding expanded projects.
Mr. Le Huu Quang Huy believed that investment promotional activities must be speeded up to attract more FDI into the central region, especially investment projects in traffic systems and infrastructure under the socio-economic development plan towards 2010 and the following years.
Investment portfolio should be diversified. BT and BOT projects should be welcomed to encourage private sectors to invest in industrial zones, economic zones and projects in transportation, irrigation, waste treatment…
Under bilateral and multilateral commitments, restrictions imposed on foreign investment should be removed to increase FDI in basic sectors such as cement, iron and steel, beverage, telecom, power…
Source: Vietnam Economic Times
