The southern province of Dong Nai has always been the most attractive destination for foreign investors in recent years, drawing an average of over US$1 billion a year even in the face of global economic crisis. In an interview given to Vietnam Business Forum, Ms Bo Ngoc Thu, Director of Department of Planning and Investment, said the province selectively licenses investment projects, with priority given to those using advanced, environment-friendly technologies, manufacturing industrial parts, providing services and investing in infrastructure. Kien Tuong reports.
Could you please tell us about foreign direct investment (FDI) attraction results of the province? What are the factors that make this success?
In the past years, although Vietnam saw decline in FDI attraction because of global economic downturn, Dong Nai province still managed to achieve good and stable results. FDI projects have had progress in quality. Most new projects focus on high-tech technologies and support industries which are in line with the province’s investment direction.
In 2012, the province attracted US$1.2 billion of FDI capital, ranking fourth in the country, over 33.4 percent higher than the yearly plan. Among 53 new investment projects licensed in the year, 24 projects registered to invest in supporting industries (with US$520 million) and three projects were engaged in high technology (US$14.6 million). Foreign investors disbursed US$927 million, exceeding the annual target by 27.5 percent. In 2013, FDI capital reached US$1.64 billion, up 36 percent year on year and 82.4 percent higher than the 2013 plan. Among 82 new FDI projects are one hospital project, two high-tech projects and 26 supporting industry projects. Foreign investors disbursed US$1 billion in the year, 11 percent higher than the full-year plan. In the first quarter of 2014, Dong Nai ranked third nationwide in FDI attraction with US$439.8 million, up 34 percent year on year and equal to 55 percent of the full-year target. Seven out of 15 projects licensed registered to invest in supporting industries and the rest was environment-friendly industrial projects. FDI disbursement reached US$250 million in the quarter, equal to 25 percent of the yearly target.
As of March 31, 2014, the province had attracted 1,398 FDI projects with a total investment capital of US$24.5 billion. For the time being, 1,091 projects are in force, with a total investment capital of US$20.444 billion. Up to 97.2 percent of projects are in operation without any problems, only 0.02 percent of projects were slow to deploy, 0.03 percent of projects were suspended owing to financial difficulties, and 318 projects totalling US$4.369 billion had their investment certificates revoked.
Dong Nai is always the most interesting destination for foreign investors because its industrial parks have complete infrastructure and smooth transport systems. Specially, the provincial government particularly focuses on administrative reform, and administrative procedures are processed in accordance to single-window and one-stop source mechanism where service quality is getting better. On the other hand, the province is persistent with the working principle “government accompanies businesses" and investors are supported from the time they go to the province to the time they put their projects into operation. The provincial leadership is ready to listen to investors’ feedback to guide subordinate units to seek solutions to their problems. If the problems needed to be resolved are out of its authority, the province will submit to the central government for solution.
Besides, Dong Nai province has effectively carried out investment promotion and investors have been thus informed clearly of local situations before they make investment decisions. In addition, the success of operational FDI enterprises is a very convincing proof to new ones.
According to economic experts, Dong Nai province’s ability to draw a lot of FDI capital proves its efforts to change the thinking of investment attraction. So, what are the changes in thinking?
The investment attraction results are accrued from many factors in combination. Apart from general solutions for a better investment environment, the changes in investment attraction orientations and the changes in investment promotion are very important.
In the past years, the province has promoted investment in some potential countries and signed contracts with foreign agencies to promote investment in their countries. Importantly, existing successful investors in Dong Nai are the most effective channel.
In 2014, the province hoped to draw US$700-900 million of FDI capital, including both fresh and added capital. Why did Dong Nai province set a lower target for 2014 than in 2013?
Dong Nai province set a target of US$700 - 900 million of attracted FDI capital for 2014, lower than in 2013, because the province advocated selective licensing, with priorities given to projects using advanced, environment-friendly technologies, manufacturing industrial parts, providing services and investing in infrastructure. Supporting industry projects often have small-scale and require small capital.
In 2013, the province attracted US$1.6 billion of FDI capital, 48.3 percent of which was added capital from existing projects. In 2014, some projects have announced investment expansion but they have yet to release the official value.
To facilitate FDI enterprises to invest in the southern key economic zone, what will the province do in 2014 and beyond?
In the coming time, Dong Nai province will mobilise all resources to develop technical infrastructure to meet social and economic development requirements, ensure water and electricity supplies, transportation and communication services; and encourage environment-friendly, energy-saving technologies in industrial production. Besides, the province will actively encourage supporting industry projects to serve backbone industries like mechanical manufacturing, electrics - electronics, organic food processing and relocate labour-intensive projects to rural areas.
In addition to supporting investors with initial project establishment documents and providing information about policies and priority fields, Dong Nai province will continue to review regulatory documents to eradicate overlapping or unsuitable regulations. Meanwhile, the province will step up investment promotion, particularly assisting existing investors in Dong Nai province, to catch the interest and attention of new foreign investors.
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