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South lures foreign investment
Southern provinces remain as attractive as ever to forforeign investors, drawing in more than US$1 billion in foreign direct investment (FDI) so far this year.
A major convention and tourism complex and a large resort are just two of the 10 projects already in the pipeline this year for the southern coastal province of Ba Ria-Vung Tau.
The US-based property developer Skybridge Dragon Sea will develop a US$902 million convention and tourism complex in Vung Tau, while a joint venture between South Korea's Daewon Co., Ltd and Vietnamese property developer Thu Duc Housing Development Corporation will build a resort in Long Hai Town for $20 million.
On February 22, licences for the 10 projects were issued, with a combined investment capital of $1.25 billion, according to authorities.
Two of the foreign direct investment (FDI) projects are worth $922 million, and the remaining are locally invested, with a total capital of $329.3 million.
Ho Van Nien, the provincial People's Committee deputy chairman, says
Ba Ria-Vung Tau has targeted 20 FDI projects with a combined capital of $2 billion for 2010.
In 2009, foreign investors poured more money into Ba Ria-Vung Tau than in any other province. Some $6.7 billion was pledged for 26 projects that had received licences, and 12 projects are already underway.
As of late last year, the province had 260 foreign-invested projects with a total registered capital of $25.2 billion and 322 domestic investment projects worth VND123 trillion ($6.56 billion).
In addition to Ba Ria-Vung Tau, foreign investors have found other southern provinces attractive.
According to the Ministry of Planning and Investment's Southern Centre for Foreign Investment, seven of the country's top 10 FDI attractions are localities in the central and southern regions.
They are Quang Nam, Phu Yen, Ninh Thuan, Binh Duong, Dong Nai, HCM City and Ba Ria-Vung Tau.
As of December 15, 2009, the combined registered capital for FDI projects in these localities amounted to $103.6 billion, accounting for 58.5 per cent of the total registered capital for nearly 11,000 FDI projects still valid across the country.
Ever since foreign investors began to pour money into the country in 1988, FDI capital has exceeded $177 billion, as of the end of 2009 (see table).
Housing, hotels, property, manufacturing and construction are the most attractive sectors for foreign investors, according to Nguyen The Hung, deputy director of the Southern Centre for Foreign Investment.
Hung says improved and better coordinated development of infrastructure such as highways, railroads, ports, airports, industrial parks and economic zones helped make the investment environment of the southern region more competitive.
"The southern region's business and investment environment has a good foundation which was built much earlier than that of the northern region."
Better integration
This foundation can now help the region adapt to the market-oriented economy and better integrate with the global community," Hung adds.
The southern region also has a good human resources base, with a better educational background, he says.
In addition, the leadership of the provincial authorities in the south has always shown to be "creative and dynamic" at crucial moments, according to Hung.
"Southern businesspeople seem to be more dynamic and flexible, and have courage in taking responsibility and action."
To mobilise more FDI, provincial authorities need to be more aware of the important role of FDI in economic development.
Hung says provincial authorities must pay greater attention to the FDI situation in their localities so that they can give timely and flexible guidance on these issues.
He points to the southern province of Binh Duong, saying it has taken the lead in attracting foreign investment because it was the first locality in the country to initiate the "Red-Carpet Welcome to Investors" policy.
In 2009, Binh Duong licensed 99 FDI projects capitalised at $2.5 billion, 2.4 times as high as the FDI target set for last year, according to MPI's figures.
Hung says Binh Duong also has mapped out a roadmap to attract, assess and license investment projects in the province.
The process includes publicising investment opportunities, introducing the province's investment environment, and assessing projects and offering licences.
Managing licensed FDI projects and supporting investors during implementation of FDI projects are also part of the process.
"We'll continue our effort to perfect Binh Duong's investment environment, and to carry out more liberal policies and measures to attract foreign investors to our province," says the chairman of Binh Duong People's Committee, Nguyen Hoang Son.
To better attract FDI capital, Hung says the provincial authority should avoid actions that benefit their own localities, and instead should co-operate with other provinces to have inter-provincial measures that will help better attract FDI into the region.
Climate challenges
To counter the impact of global climate change, the provincial authorities in the region, and in particular the Cuu Long (Mekong) Delta, must be cautious in making decisions about developing industrial parks and complexes.
Hung says Mekong provinces should never license projects to build industrial and entertainment parks on land for agricultural production and aquaculture.
Provincial authorities should carefully consider the environmental and economic consequences of licensing projects to develop urban and residential areas on arable land. These projects should be located on infertile land that cannot be used for agricultural production, he warns.
Top FDI localities
(As of December 15, 2009)
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Localities |
Number of FDI projects |
Registered capital (in US$) |
Legal capital
(in US$) |
|
1 |
HCM City |
3,140 |
27,214,859,297 |
9,735,280,636 |
|
2 |
Ba Ria - Vung Tau |
211 |
23,641,917,748 |
6,444,532,489 |
|
3 |
Ha Noi |
1,644 |
19,473,325,864 |
7,461,354,830 |
|
4 |
Dong Nai |
1,028 |
16,339,129,459 |
7,171,568,424 |
|
5 |
Binh Duong |
1,946 |
13,394,129,566 |
4,618,771,680 |
|
6 |
Ninh Thuan |
25 |
10,080,426,566 |
853,628,678 |
|
7 |
Phu Yen |
49 |
8,149,956,438 |
1,807,818,655 |
|
8 |
Ha Tinh |
10 |
7,990,105,000 |
2,736,915,000 |
|
9 |
Thanh Hoa |
33 |
6,996,148,144 |
465,461,987 |
|
10 |
Quang Nam |
65 |
4,885,292,621 |
379,613,440 |
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