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To wake up Central Highlands, more than capital needed
VietNamNet Bridge – A forum on promoting investment in the Central Highlands is expected to take place on September 5, 2009. However, experts have identified a lot of things that need to be done to develop the local economy.
35-40 trillion dong worth of investment needed by 2010
Though its GDP has grown continuously by over 10 percent per year since 2001, according to Deputy Chairman of the Central Highlands Steering Committee Mai Van Nam, the Central Highlands remains a disadvantaged area with a developmental level which does not correspond to its potential.
According to Deputy Minister of Planning and Investment Nguyen Bich Dat, despite the high GDP growth rates, the Central Highlands has not been developing sustainably. Agriculture and forestry production account for a high proportion of the GDP structure in the region. However, in this sector, forest protection remains problematic. Industries here are developing, but the industries still cannot make products with high competitiveness.
Regarding foreign direct investment (FDI), the FDI in the Central Highlands just accounts for 1.4 percent of total projects in Vietnam and less than 0.5 percent of total investment capital. While Vietnam attracted $70 billion worth of FDI capital in 2008 and $10 billion in the first seven months of the year, the Central Highlands has registered almost no FDI growth.
According to Dat, the Central Highlands needs a huge volume of funds to develop, estimated at 35-40 trillion dong by 2010. Of this amount, the state budget can provide 35 percent, while the other 65 percent is expected to come from official development assistance (ODA), FDI and domestic sources.
Central Highlands needs more than money
While government agencies are trying to call for more capital in the region, businesses have said that what the Central Highlands needs is not only money.
Nguyen Thai Hoa, Chairman of Thai Hoa Group, a big coffee exporter in Vietnam, said that because of tardiness in guaranteeing for loans, Thai Hoa’s soluble coffee workshop in the Central Highlands will only be able to become operational in 2011, though it should have been operational already.
An said that it is not really a difficult task for him to be approved for loans. A lot of financial institutions have asked to provide loans. However, in order to wrap up deals, the company needs to get the guarantee of a domestic bank. And this is the biggest barrier to the business being able to access capital. This has forced the business’ projects to slow down and forced it to change many things in its development strategy.
Deputy General Director of the Vietnam Coal and Mineral Industries Group (Vinacomin) Duong Van Hoa has also identified many things hindering the development of the Central Highlands: difficulties in site clearance, poor infrastructure, the lack of workers, including blue-collar workers.
Hoa said that both roads to the Central Highlands have become too narrow and degraded, which has made it difficult for travel and transport. Moreover, the land use rights of people are not clearly defined, which makes site clearance go slowly.
He went on to say that Vinacomin always carries out big projects worth several trillion dong, therefore, it loses huge sums of money if projects are just a few months behind.
Hoa related that Vinacomin has recently sent 11 Central Highlands’ students who failed university entrance exams abroad for special training, showing that human resources is another big problem of the region.
Vinacomin now has several thousand workers working for the group’s project in the Central Highlands, but there are very few workers of local minorities.
vietnamnet, vneconomy
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