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Investment promotion activities in chaos
Phan Huu Thang, Head of the Foreign Investment Agency under the Ministry of Planning and Investment, said that there exist problems with investment promotion activities.
Problems in management
There are 60 investment promotion agencies for the region from Thua Thien-Hue to Ca Mau provinces, including 17 agencies now under the management of provincial People’s Committees, which are in charge of investment, trade and tourism as well. 11 other agencies are under the management of local investment and planning departments, while some others belong to industrial zone and economic zone management boards, chambers of commerce and industry, departments of foreign affairs, or departments of industry and trade.
The existence of too many management agencies has led to ineffective and chaotic investment promotion activities.
An official from the Thua Thien-Hue Investment Promotion Agency said that this has led to unhealthy competition among localities in attracting foreign investment. “Local authorities have been scrambling to offer investment incentives to lure investment. Evert province and city is trying to build steel mills, airports, seaports and even oil refineries,” the official said.
Deputy Minister of Planning and Investment Nguyen Chi Dung also said that local authorities have been spontaneously lowering land leasing fees, offering tax exemptions and a lot of incentives to lure investors.
“We can’t get anything from this, while we have lost a lot of things,” Dung said.
Central investment promotion agency needed
According to the Ministry of Planning and Investment, Vietnam is lacking an investment promotion agency at the central level, which explains why a strategic viewpoint on investment promotion is also lacking.
The Da Nang Investment Promotion Centre is now undertaking the functions of both state agency managing foreign direct investment and investment promotion centre as well.
The unsuitable operation mechanism of investment promotion centres has led to the ineffectiveness of the organs. The expenses for running investment promotion activities prove to be very modest.
Every investment promotion centre has 15 staffs on average, while the centres in some localities have only a handful.
In some localities, the budget to maintain such centres is very small, VND50-100mil a year, enough for administrative fees only. There is no money to promote investment. In previous years, the expenses did not come from local budgets, but from aid, like official development assistance.
Dung said that it is necessary to gather investment promotion agencies and put them under the management of province and city People’s Committees.
The investment promotion centre in the southern province of Binh Dinh has been cited as a good model for other provinces to follow. The centre belongs to the provincial People’s Committee. In fact, the Management Board of Industrial Zones and Nhon Hoi Economic Zone Management Board also have their own investment promotion divisions. However, all the divisions receive instructions from the investment promotion centre.
VNN
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