Land: Still a Problem for Private Sector

Land: Still a Problem for Private Sector

Land has always been a crucial issue in Vietnam. At the time of the expansion of the private sector it is even more difficult to find enough land for workplaces and business activities.

No easy access

According to the WB, private enterprises seeking land use right from provincial people's committees may take several years and they must be in assigned industrial zones. Usually, the local authorities develop industrial zones on agricultural land and rent to companies with 50-year agreements. However, problems arise when agricultural households do not accept the rates of land compensation, such as the case of An Khanh IZ.

While the industry runs short of land, vast areas are left unused. The problem exists even in Ho Chi Minh City. The city has 17 IZs with 1,397 ha but only three quarters of the area can be rented. And the demand continues to increase: 10 per cent in 1994 and 15 per cent in coming years.

The transformation of agricultural land to industrial land takes a long and complicated process and the application is different from province to province. It often takes 2-3 years and the companies have to pay several unnamed expenses. Many private companies have to rent land from State-owned enterprises. However, as the renting is not lawful or stable, they could not have a long-term business planning. In addition, the rental is often high affecting the competitiveness of the companies.

Some solutions?

If the government provides better access to land, the private sector would generate much more jobs and contribute significantly to economic development. According to WB, the government should encourage State-owned enterprises to lend the unused land and implement a land policy equitable to all concerned sectors including agricultural households. Without such action, the private sector would suffer losses and slow development.

• Lan Anh