Investment Flow - Driving Force for Socioeconomic Development

11:10:50 AM | 31/1/2020

With its open policies, Vinh Phuc province’s investment environment is always highly appreciated. Vietnam Business Forum Magazine has an interview with Mr. Nguyen Van Do, Director of the Vinh Phuc Department of Planning and Investment.

 Could you please tell us some outstanding achievements in investment attraction that the province has made?

As of December 31, 2019, Vinh Phuc province has attracted 1,146 projects, including 757 DDI projects with a total registered investment capital of VND86,500 billion and 389 FDI projects from 18 countries and territories with total investment capital of US$5.5 billion, led by South Korea with 203 projects with total registered investment capital of US$2.2 billion; followed by Japan with 46 projects with total registered investment capital of US$1.15 billion; Taiwan (China) with 37 projects, total registered investment capital of US$0.94 billion. The remaining investment projects come from Singapore, China, Thailand, Italy, Netherlands, India, Russia, France, Sweden, United States, and Spain.

Vinh Phuc's investment environment has always been highly appreciated by investors. Many world-leading corporations have decided to invest in Vinh Phuc province, including Honda, Toyota, Piaggo and Jawwa, which are manufacturing key industrial products, employing local workers, increasing budget revenue and boosting export value. Besides, well-reputed domestic investors have studied and carried out their projects to unlock local potential advantages in tourism and agricultural services. Vingroup, Sungroup, FLC and T&T are clear evidence of the province’s achievements in investment attraction.

2019 was seen as an exciting year for the province’s investment promotion, with a lot of conferences, working sessions and contacts between authorities and domestic and foreign investors. The effect of investment promotion was illustrated with investment attraction results in the past year. Specifically, the province drew US$1.16 billion of FDI capital in 2019, twice as much as in 2018. The FDI value licensed in 2016-2019 exceeded the target of US$1.3-1.5 billion in 2016-2020 set in the Resolution of the 16th Provincial Party Congress.

Investment projects have made important contributions to the province's socio-economic development such as the average GRDP growth rate in the period 2016-2019 reaching 8%/year. Particularly in 2019, GRDP growth rate reached 8.05%, of which investment projects contributed over 50% of the province's production value; GRDP scale at current prices reached VND118.4 trillion; State budget revenue exceeded VND35 trillion (FDI enterprises contributed over 65% of total State budget revenue; Honda and Toyota Vietnam alone contributed 58.9% of the total provincial budget revenue); the province created about 120,000 jobs.

 The rapid socioeconomic transformation of Vinh Phuc is partly resulted from flexible investment attraction approaches which are suitable for local industrial development. Could you tell more about main contents of the province’s investment incentivization and attraction policies?

In 1997-2000, the Resolution of the 12th Provincial Party Congress set out the direction: “Focusing all resources to encourage all economic sectors to invest in developing industry and cottage industry. The main direction is to strongly develop foreign-invested industries.” Vinh Phuc adopted investment attraction policies, prioritized resources to invest in infrastructure of Kim Hoa Industrial Park, Khai Quang Industrial Complex and Quang Minh Industrial Complex to create an available land fund to court foreign investors. Hence, the province attracted important projects and paved the way for future local socioeconomic development, particularly projects invested by Honda and Toyota.

In 2001-2005, the Resolution of the 13th Provincial Party Congress and the Vinh Phuc Socioeconomic Development Plan in 2001-2005 stated: “Speeding up the planning and development of concentrated industrial parks, accelerating planning, attracting foreign investment and clearing the ground are top priorities”. During this period, Vinh Phuc introduced policies to provide financial support for infrastructure project investors to complete infrastructure construction in Quang Minh Industrial Park and Khai Quang Industrial Park to create a turning point in attracting mechanical engineering, electric - electronics, automobile and motorbike component manufacturing projects.

In 2006-2010, the 14th Provincial Party Congress determined “Focusing on industrial development and regarding industry as the foundation of the economy in order to create high growth and employment, increase fiscal revenue, stimulate service and agricultural development, accelerate local economic and labor restructuring”. This period witnessed the biggest FDI inflow since the province was re-established. FDI projects were mainly engaged in electronics and supporting industries for electronic component manufacturing.

In 2011-2015, the 15th Provincial Party Congress defined “Striving become a basically industrial province by 2015, become a modern industrial province by 2020 and to become Vinh Phuc City in the 2020s”. To realize this goal, the province advocated attracting FDI projects that used clean technologies, generated added value, employed advanced technology, and developed supporting industries. The province drew tourism and service projects in order to modernize the economy and create sustainable development.

In 2016-2020, the 16th Provincial Party Congress defined “Striving to build Vinh Phuc into one of regional industrial and tourist centers and basically complete the urbanization framework to be upgraded to Vinh Phuc City in the 2020s”. Accordingly, the province focused on attracting investment projects into existing industrial parks; prioritized large-scale high-tech projects; proactively spared land for building new industrial parks for investors in accordance with the approved planning.

More than 20 years since its re-establishment, with many breakthrough mechanisms and policies for industrial development investment, Vinh Phuc has achieved great successes.

With the working principle “Investors in Vinh Phuc are citizens of Vinh Phuc and the success of the business is the success of the province”, Vinh Phuc has always strived to carry out solutions to improve the business investment environment and create the best conditions for business development. Could you tell us more about this?

In recent years, Vinh Phuc has made great efforts in improving the investment and business environment. It has focused on upgrading essential infrastructure, promoting administrative procedure reform and improving the quality of human resources. Therefore, the investment environment is always stable; the Provincial Competitiveness Index is always at the top of the country; the quality of infrastructure is increasingly improved (in 2018, the province secured the third place in VCCI’s PCI rankings). In each specific period, Vinh Phuc province has specific ways and solutions to improve the business environment such as developing and implementing the Project to improve the investment environment; establishing specialized agencies for investment promotion; establishing public administration centers at district-levels and city-levels; set up provincial Land Clearance and Development Board to quickly clear ground, create clean land fund for projects; focusing on on-the-spot investment promotion activities to promptly solve difficulties and problems for businesses. The province is committed to providing the highest preferential treatment support. In addition, the province also has support policies for projects in the field of priority investment attraction. These important solutions have helped improve the local investment and business environment in 2016-2020.

After the period of rolling out the red carpet to welcome investors, Vinh Phuc province is now selectively licensing investors that meet ecological environment requirements. Could you elaborate the province’s views and solutions on investment attraction in the coming time?

To utilize local resources and potential advantages in order to speed up socioeconomic development in the coming time, Vinh Phuc province will give priority to licensing industries that help the province catch up with the Fourth Industrial Revolution such as information and communication technology (ICT), digital technology, nanotechnology, biotechnology, new materials and other fields where the province has competitive advantages (e.g. mechanical engineering, construction material, supporting industries for motorbike and automobile manufacturing); and wooing investors into industrial zones to increase occupancy rate.

Vinh Phuc province will target foreign investors and multinational corporations; focus on attracting those from Japan, South Korea, European Union countries (EU), the United States as well as reputable domestic investors to invest in the province.

Thank you very much!