Inside a building material factory at the Vietnam - Singapore Industrial Park. Nghe An province is seeking to improve FDI efficiency (Photo: VNA) Hanoi (VNS/VNA) - Foreign direct investment (FDI) has contributedsignificantly to the economic development of Nghe An province but more actions areneeded to improve its efficiency and increase FDI enterprises' contribution tothe State budget.
Locatedin the heart of the North Central Region, the province has attracted 249projects with a total registered capital of almost 62 trillion VND (2.7 billionUSD), 48 of which are FDI projects with total investment of 825.3 million USD.
Somelarge-scale FDI projects in the Southeast Nghe An Economic Zone include 140million USD Luxshare-ICT project invested by Hong Kong-based Luxshare ICT (NgheAn) Co Ltd; Vietnam-Singapore Industrial Park (VSIP) invested by Singapore’sVSIP Nghe An Co Ltd with a total investment of 76.4 million USD; and Thai WHAGroup’s WHA Nghe An Industrial Zone – the first phase worth 92.2 million USD.
FDIprojects in the province focus on labour-intensive sectors such as garmentand textile, electronic components manufacturing, agricultural and forestryproducts processing and consumer goods production. These projects employ alarge amount of labour, especially unskilled workers in the province, while atthe same time developing services attached to operations of industrial parkssuch as accommodation, catering and trades.
Accordingto the Southeast Economic Zone Management Board, FDI projects have contributedto improving the investment environment in the locality, helping train localworkers and strengthen governance skills of managers. Many foreign-investedenterprises have also paid attention to giving back to the communitythrough social responsibility activities.
However,FDI projects invested in the province are mostly small-scale and theircontribution to the State budget is insignificant and much lower compared tothe domestic enterprises.
In2019, payment to the State budget of FDI enterprises accounted for less than 12percent of total contribution of all enterprises in the Southeast Economic Zone.
Theboard highlighted more measures are needed to put into place to improve the FDIefficiency and quality of operations of FDI enterprises in the province.
Thefirst and most important thing is to enhance mechanisms and supportpolicies to attract FDI, including more incentives, administrative reform andimprovement of the business and investment environment of the province.
Theprovince needs to review and adjust the master plan on construction of theSoutheast Economic Zone, reshaping functional zones and industrial parks tomeet the requirements of high-quality FDI in the next five-year period.
Infrastructureis a key issue that needs the highest priority. The province needs to build acomprehensive system of infrastructure, transportation, seaports, urban areasand hospitality services to facilitate operation of FDI investors.
TheFDI attraction approach should also be changed to be proactive when seekinginvestment with priority given to big and multinational corporations withadvanced technology, technology transfer commitment and environmentallyfriendly projects.
Inthe long term, the province needs to attract projects with high value-addedchains such as automobile and motorcycle manufacture and assembly;manufacturing and assembling electronic components, computers; key mechanicalindustries and high-tech processing and manufacturing.
Toattract high-quality FDI, the tasks of training and developing local humanresources and improving qualification of government officials alsoneed more attention.
Currently,the Southeastern Economic Zone Management Board is supporting investmentprocedures for a number of large-scale projects such as Juteng Group's 200million USD computer manufacturing and assembly project, USA Everwin Group's 200million USD electronic equipment and component manufacturing project andFoxconn’s 300 million USD electronic component manufacturing project./.
VNA
