Restructuring takes careful steps

HCM City Chairman Le Thanh Hai says economic restructuring in HCM City requires careful moves

 

. In a recent interview with the press, Hai said the city’s economic restructuring is basically a transition from labor-intensive industries to sectors with a high content of “gray matter” and high added-value. “This is not only an economic issue but is related to many social issues in which jobs for people must be carefully calculated. Industry accounts for a big percentage in the city’s economic structure. If it were changed immediately, millions of workers will lose their jobs,” he said.

On the basis of the project “Boosting the transition of HCM City’s economic structure for fast and sustainable growth,” which the prime minister’s research section set up for HCM City, the city will develop each program in order to rapidly increase the proportion of key product and service groups. Each program has to attract investment from many economic sectors. “The city will create conditions for different economic sectors to take part in developing all kinds of services that are not subject to State monopoly,” Hai said. He stressed that doing so will make it possible for changing the economic structure but will not cause employment disorder.

One problem in economic restructuring of HCM City is despite being the biggest trading center of Vietnam, the service sector has a modest contribution to the city’s economic growth.

The city’s strength is services but 80% of the current services are eating and drinking, markets, restaurants and hotels,  and only 20% are high-class services. Hai said to promote services like real estate, finance, tourism, marine transport, ports and warehouses, insurance and consulting, HCM City is unable to do the job alone. It needs the role of central-level macro-economics. The city has petitioned for a focus on three programs to strongly develop the service sector: perfecting the operational mechanism for the involvement of financial or investment companies and investment funds in developing the capital market; increasing the test program allowing the engagement of foreign investors in the real estate market; and boosting the development of the telecom-information technology market through opening the market for local investors earlier than the roadmap to which Vietnam has committed itself in the Vietnam-U.S. bilateral trade agreement.

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