Last updated: Thursday, March 23, 2017
20 Years of Vinh Phuc Economy: Achievements from Innovative and Dynamic ThinkingPosted: Tuesday, December 27, 2016
With its potential and position, plus innovative thinking and dynamic investment attraction policies, Vinh Phuc province has become an effective destination for many major projects in 20 years since re-establishment, thus contributing to the success of many entrepreneurs, the growth of businesses and the prosperity of the locality.
New thinking in investment attraction
After re-establishment, the province defined industrial development as the foundation and investment attraction as a driving force of economic development. Thus provincial government embarked on various solutions to create a favourable and attractive investment and business environment. From an idea to a point of view that “investors are citizens of Vinh Phuc and the success of enterprises is the success of the province,” Vinh Phuc province introduced a variety of appealing investment attraction policies.
Defining that administrative reform was the key to unlock an open investment environment, the province promptly enhanced the capacity of government at all three levels of province, district and commune, while introducing many public administration reform programmes and plans for specific periods and phases. Therefore, in 2007 when the country started administrative reform, Vinh Phuc had successfully applied the one-stop single-window mechanism. Investment projects licensed in Vinh Phuc province needed a third of regulatory time to be completed with highest publicity and transparency (investment licensing needed 3-5 days compared with 15 days provided in the law). In 2002, the province established an agency for administering industrial zones for investment promotion, consulting, appraisal and licensing. In districts with industrial zones, Vinh Phuc set up steering committees for site clearance and land compensation to quicken the implementation of projects. And, most recently, the Vinh Phuc Investment Promotion Agency (IPA Vinh Phuc) was founded to receive documents and supervise other bodies in delivering administrative procedures in the single-window mechanism and grasp emerging difficulties to report to the Provincial People’s Committee for resolution. Every year, the provincial government holds dialogues with local businesses in order to learn about their problems and introduce prompt solutions.
With its drastic actions, Vinh Phuc province created an attractive investment environment, evidenced by the increase in investment projects. The province had only eight foreign direct investment (FDI) projects and one domestic direct investment (DDI) project in 1998 and 856 projects in 2016, including 227 FDI projects with US$3.4 billion in total and 629 DDI projects with a combined registered capital of VND49.2 trillion, 55 per cent of which are operating effectively.
The province also took strong action in mobilising official development assistance (ODA) and achieved important results, especially in 2011-2015. The Provincial People’s Committee hosted regular meetings with business partners and central agencies every year.
To date, total ODA value in the province has amounted at US$177 million, of which US$123.7 million was managed by Vinh Phuc. In addition, the province successfully called donors for three projects with an expected value of US$350 million. ODA and NGO funds have contributed significantly to adding investment capital to local development, building an attractive investment environment, upgrading infrastructure, raising people's living standards, and reducing environmental pollution.
Interests in supporting economic sector development
As local enterprises have faced numerous difficulties arising from the global economic downturn in recent years, the province has directed the application of various measures to better the investment environment, improve the provincial competitiveness, step up administrative procedure reform, maintain the one-stop single-window mechanism at the district level, operate the government - business dialogue information portal to timely collect and answer questions from enterprises, intensify examination and inspection of investment projects, eradicate slow-moving projects, and open the “business coffee hours” on Fridays - an interactive forum for enterprises and officials. Therefore, local companies have created more jobs and paid more taxes to the province. With strong actions from all tiers of government, 20 years after re-establishment, the province had 91 enterprises with a combined registered capital of VND57 billion in 1997 and 7,394 companies with a registered capital of VND55.9 trillion in 2016 (an increase of 981 folds).
Carrying out Party and State policies, Vinh Phuc province set up the Business Reform and Development Committee to advise the provincial government on restructuring, reform and performance improvement of transformed State-owned enterprises. The province has reshuffled 48 companies (41 companies and seven affiliates). At present, Vinh Phuc has 10 State-owned companies, including six wholly State-owned enterprises and eight partially State-owned enterprises. The State divested five out of seven companies and the remaining two have planned for public offering. Vinh Phuc province was praised by the Government of Vietnam as one of two provinces with best SOE equitisation in the country.
The province has also focused on developing collective and cooperative economies. At present, it has 714 cooperatives, with some operated in new models. Cooperatives are playing an important role in restoring and developing traditional cottage industries, generating jobs, increasing incomes for people in rural areas, and speeding up economic restructuring process and labour structure.
Vinh Phuc province is always consistent with the viewpoint that “The property of investors in Vinh Phuc province is the property of Vinh Phuc province; products of investors in Vinh Phuc province are the brands of Vinh Phuc province; difficulties of investors are difficulties of Vinh Phuc province; the success of investors is the success of Vinh Phuc province.” The province is confident that Vinh Phuc will continue to accompany and support businesses for shared prosperity and growth.
In 20 years since re-establishment, to date, the province’s economy has progressed strongly. The average annual growth was over 20 per cent.
Dang Xuan Vinh