HCM City (VNS/VNA) - The Southern Key Economic Zone needs specialpolicies to attract foreign direct investment (FDI) and improve linkagesbetween localities to ensure sustainable development, experts have said.

The Southern Key Economic Region includes Ho Chi Minh City and the provinces ofBinh Phuoc, Tay Ninh, Binh Duong, Dong Nai, Ba Ria-Vung Tau, Long An and Tien Giang.

The region accounts for only 8 percent of the country’s area but plays aleading role in its economic development as it makes up 60 percent of theGovernment’s revenues.

The region ranks highly in FDI attraction, accounting for 50 percent of thecapital and 60 percent of projects of the entire country.

However, the region’s technical and social infrastructure has not metsocio-economic development needs, experts said.

Dr Du Phuoc Tan, head of the urban management and research division at the HCMCity Institute for Development Studies, said the region needed a huge amount offunds each year to develop road infrastructure, but the funds allocated by the governmentwere insufficient.

“The Government’s finances are limited, so we need to look for other sources ofcapital,” he said.

According to statistics from the Ministry of Transport, around 300 trillion VND(12.9 billion USD) is needed to build road infrastructure in the region.

Tan said that policies for financing traffic infrastructure linking the cityand provinces in the region and elsewhere in the country are limited, and theGovernment should issue more “breakthrough policies”.  

A transport development plan in the region by 2020 envisages building more newexpressways such as between Bien Hoa city in Dong Nai province and Vung Tau cityin Ba Ria-Vung Tau province, between HCM City and Binh Phuoc province’s ChonThanh district passing through Binh Duong province’s Thu Dau Mot city, betweenLong An province’s Ben Luc district and Dong Nai’s Long Thanh district, andbetween HCM City and the Moc Bai international border gate in Tay Ninh province.

Many other waterway transport projects are expected to be added to the plan.

With a leading role in the region, HCM City has proposed many solutions tomobilise capital for socio-economic development not only for the city but alsofor the whole region.

In 2010, the city government issued a decision on the establishment of the HCMCity Financial Investment Company (HFIC).

To date, HFIC has attracted investment in major infrastructure projects in thecity to ensure efficient use of State capital.

HFIC has provided credit for 131 infrastructure projects in the city with atotal investment of more than 14 trillion VND with a credit limit of 6.076trillion VND in key fields such as technical infrastructure (33 percent),health (22 percent), education (41 percent) and others (4 percent).

HFIC has also managed a number of funds from the city budget such as a powergrid renovation project; science and technology development fund; informationtechnology human resources development fund; and pollution reduction fund.

It has also given loans to social and political organisations with totaldisbursement value of 2.064 trillion VND, while ensuring debt collection in atimely manner.

Le Thi Huynh Mai, deputy director of HCM City Department of Planning andInvestment, said the city government should issue government bonds to mobiliseinvestment capital.

The department will seek funds from the private sector for infrastructureprojects, she said.

She said the department would continue to seek potential investors for allsectors through public-private partnerships (PPP).

The department will also connect investors with banks and credit institutions,and help businesses access loans and simplify administrative procedures.

Binh Duong province has proposed solutions to attract local and foreigninvestment by creating a favourable investment environment.

The province has improved road infrastructure significantly to enhanceconnections with HCM City and surrounding provinces, developed concentratedindustrial zones (IPs), and attracted labour resources from provinces andcities in the country.

As of the end of 2018, the industry-service sector had accounted for 88.2 percentof Binh Duong province’s economic structure, while budget revenue collectionhad reached 50 trillion VND and per capita income 130.8 million VND per year.

The province has no poor households, according to national criteria.

Meanwhile, Dong Nai province has shifted to attracting FDI from bigcorporations, investment projects in high-tech fields, and supportingindustries instead of projects using outdated technology. 

Improved infrastructure and consistent land planning have helped Dong Naiattract investors.

In the past five years, Dong Nai has attracted more than 1.7 billion USD of FDIeach year.

In 2018, Dong Nai had 27 trillion VND of domestic investment and 1.85 billion USDworth of FDI.

Mai Van Nhon , deputy head of the Dong Nai Industrial Zone Authority, said theprovince has provided many solutions to support businesses.

Every year the province organises many dialogues to solve obstacles forbusinesses. Dong Nai also works with other localities with large labourresources to support enterprises to recruit workers.

Dong Nai has also furthered administrative reform to attract more investment inthe province.

In Binh Duong, in the 2011-15 period, total investment for road infrastructurereached more than 98 trillion VND, accounting for 37.3 percent of the totalcapital, of which the budget capital accounted for only 24.8 percent with therest coming from other economic sectors.

The capital source is primarily for investment in transport infrastructure andconstruction of industrial parks.

Currently, Binh Duong province has 29 IPs with a total area of 12,7ha, of which27 IPs are operating with leasing area of 80.8 percent.

Phu Huu Minh, deputy director of the province’s Department of Planning and Investment,said mobilising investment from the private sector in transport infrastructureand industrial parks had helped attract more investment.

To date, the province has 36,379 domestic enterprises with a total registeredcapital of 296.989 trillion VND and 3,509 FDI projects with a total investmentof 32.2 billion USD, contributing greatly to the province’s socio-economicdevelopment.

Recently, Binh Duong hosted the Horasis Asia Meeting 2018 to promote itspotential with international partners, improve its management capacity, andapply advanced technologies to implement its smart city.

The event offered local enterprises an opportunity to network withinternational partners who are senior founders, general directors and CEOs ofleading companies from around the world.

Binh Duong was also chosen to host the 2018 World Technopolis AssociationSummit in 2018.

Long An province has attracted about 11,748 enterprises investing in theprovince, including 951 FDI projects.

In 2018, the province’s economic growth reached 10.36 percent; per capita GRDPreached 61 million VND per year; and the poverty rate fell to less than 2.92 percent.

The province’s total State budget revenue in 2018 reached 13.83 trillion VND,topping the Mekong Delta region.

According to a Government master plan, the Southern Key Economic Region needstotal capital of 6.54 quadrillion VND for its economic development in the2015-20 period.

Total budget revenue of the region accounted for 41.3 percent of the country’stotal budget revenue.

In 2016, localities in the region had an economic growth rate of 1.5 times theaverage level of the country, contributing 60 percent of the national budgetrevenue. - VNA