news about South Keen To Attract Foreign Investment.

South Keen To Attract Foreign Investment.

2005/12/06

The southern business hub and neighboring provinces should collaborate to attract foreign direct investment (FDI), agreed local leaders at last week's conference in HCM City.

The bloc mulling unified FDI attraction includes HCM City and the provinces of Tay Ninh, Binh Phuoc, Binh Duong, Dong Nai, Ba Ria-Vung Tau, Long An and Tien Giang.

The nation's southeast is considered a Key economic zone and most dynamic region in economic growth, with the highest FDI intake in the country. Nguyen Van Phu, deputy director of the Ministry of Planning and Investment's (MPI) Development Strategy Institute, said this was the only area to be endowed with favourable conditions and advantages to develop industry and service sectors.

Mr Phu added that the region was the spearhead for modernisation, and particularly suited to advancing its high-tech sector as well as electronics, informatics, oil and gas financing and banking, and ports. Pham Hong Ky, head of MPI's Southern Region Department, said that the southeast had so far drawn the most FDI, representing some 42% of the country's FDI source, more than doubling that of the Red River Delta [at 20%]. Difficulties remained, however, with inconsistent policies between individual localities in terms of FDI attraction. Lack of uniformity in Government taxation nationwide led to provinces deciding to independently lower land use fees and income taxes to seduce foreign investors. Though satisfying a few investors, the inconsistency confuses investors with the disparate rates between regions.

Localities in the region have yet to work out long-term collaboration so as to jointly implement investment promotions, an indispensable activity that needs to be conducted frequently. Mr Phu, well aware of the problem, proposed regional provinces align with one another to create consistency in foreign investment policies while maintaining balanced development between regions.

He put forth four solutions, the first of which was to draft common and uniform policies for attracting both domestic and foreign investment to mobilise funds for high-quality service and high-tech sectors. Secondly, he suggested unifying management of construction projects at the national, regional and grassroots levels. Thirdly, co-operation in promoting investment should be strengthened to lure FDI and capital resources from businesses in the southern key economic zone. Fourthly, reforms should be made to current preferential treatment in terms of finance and investment, making no distinction between local and foreign investors. Provinces and cities in the region should join hands to issue incentive policies and mechanisms while assisting investment through information exchange, Mr Phu said.

Hanoi, HCMC, Binh Duong estimate $1bil FDI

VietNamNet ?C Hanoi, HCM City and Binh Duong Province are taking the lead in attracting foreign direct investment (FDI) with the estimated capital inflows to each exceeding US$1bil.

Hanoi, HCM City and Binh Duong Province have natural and social advantages as the three economic centres in the country that have applied healthy policies on FDI. Hanoi has been a typical example in policy reform, while the other two have always been successful in investment promotion programmes.

As of November 15, Hanoi had attracted 132 projects with total registered capital of $1,458mil. The city is expected to license 20 more projects by the end of the year, totalling $342mil and raising the total number of projects to 152 and total capital to $1.8bil. Several of the projects are large-scale, like the business cooperation contract (BCC) on CDMA networks ($656mil), Kwang Myung Hospital ($198.4mil) and a 65-strorey development by Coralis Vietnam Company Ltd ($114.5mil). With such a growth rate, Hanoi is expected to take the lead in attracting FDI. HCM City reported $830mil in investment projects, of which registered capital for newly-licensed projects was $400mil with the remaining $430mil coming from expanded projects. Most recently, the Prime Minister has approved a project for a Solid Waste Treatment Complex in Binh Chanh District, HCM City, capitalised at $100mil. Authorities also granted license to a trade fair centre underwritten by Saigontourist and a foreign partner, worth $25mil. Last month, HCM City successfully organised a trade conference to bring FDI to the city, and it hopes to attract more projects this month, putting within reach a goal of $1bil in 2005.

Binh Duong Provincial officials feel, as well, that they can reach $1bil this year. By the end of November, total registered capital approached $780mil, an increase of 70% over the same period last year. That plus 30 new projects expected in the new year. These include a project on tyre production by a Korean investor for $300mil.

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