The Government is pushing expansions of the country’s industrial zones, export-processing parks and economic zones as a strategic tool to draw foreign investment and turn Viet Nam into an industrialized nation by 2020.
|Tan Thuan was the first Export Processing Zone in Ho Chi Minh City|
From the very first export-processing zone, Tan Thuan, in Ho Chi Minh City in 1991, to 130 industrial and export-processing parks in 45 provinces and cities by 2005, the road for industry development has been a constant theme of urban planning over the last 15 years.
Most enterprises have operated profitably in the industrial zones, which in 2005 produced US$14 billion in industrial revenues and over US$6 billion in export revenues, making up 30 percent and almost 29 percent of the nation’s gross domestic output, respectively.
Last year saw a boom in industrial zones thanks to a series of new Governmental incentives, including the laws on Investment and Enterprises for both domestic and foreign investors.
Administrative reforms marked with the new streamlined procedures in the granting of licenses and investment management have also provided further fuel to the investment in industrial zones.
As a result up until of June of 2007, Viet Nam now houses 148 industrial and export-processing parks on 32,000 ha of land throughout the country. Of them, 90 industrial zones have been put into operation and 58 others are currently under construction.
Industrial and export-processing zones have so far expanded beyond the borders of industrial hubs to agricultural provinces such as Long An in the Mekong Delta, the midland province of Vinh Phuc, and Bac Ninh and Hai Duong in the Red River Delta.
Also by the end of June, industrial and export-processing zones have attracted 2,500 foreign-invested projects with a combined capital of US$24 billion and 2,700 domestically-invested projects capitalized at over VND135 trillion.
In the first half of 2007 alone, foreign investment in these zones has reached over US$2.2 billion, accounting for 40 percent of the nation’s total FDI and doubling the figure recorded in the same period last year.
Taiwan topped the investing table of countries with over US$5 billion injected into the zones, followed by Japan with US$4.3 billion and the Republic of Korea with US$3.1 billion.
Pundits point into 2003 as the catalyst for zone growth with the establishment of the Chu Lai economic zone in the central province of Quang Nam. There are now eight dotted throughout the country, including the Nghi Son zone in the northern province of Thanh Hoa, Vung Ang Ha Tinh province, Chan May-Lang Co in Thua Thien-Hue province, Dung Quat in Binh Dinh province and Van Phong in Khanh Hoa province all in the central region, and the Phu Quoc and Nam An Thoi islands in the southern province of Kien Giang.
The eight economic zones attracted some US$ 8.6 billion in investment, both from overseas and local businesses and is expected to reach US$13.3 billion by the end of the year.
The Strategic Research Institute under the Ministry of Planning and Investment reported that a number of new economic zones to be located in the central provinces of Quang Binh, Phu Yen and Nghe An are on the books for governmental consideration.
The MPI also reported a plan of promotional investment schemes in an effort to attract more capital into the zones and strengthen the surrounding local economies.