Businesses Must Be Centered in Southern Key Economic Zone Development

10:20:14 AM | 10/7/2019

Tapping and utilizing all potential strengths of the Southern Key Economic Zone and solving ‘bottlenecks’ in economic development are main contents analyzed by experts and delegates at the Forum on Business Role in Southern Key Economic Zone. The forum was organized under the direction of the Vietnam Chamber of Commerce and Industry (VCCI) and Provincial People's Committees in the Southern Key Economic Zone.

Among four key economic regions in the country, the Southern Key Economic Zone (consisting of Ho Chi Minh City, Dong Nai, Binh Duong, Tay Ninh, Binh Phuoc, Ba Ria - Vung Tau, Long An and Tien Giang) is defined as a ‘locomotive’ that drives the nation’s economic development. Over the past 10 years, its economic growth has remained stable at about 1.5 times the national average. This is considered a dynamic economic region that converges outstanding advantages for industrial, trade and service development, takes the lead in national industrialization and modernization. In 2016-2018, the region’s gross regional domestic product (GRDP) expanded 11.31% a year on average, 1.7 times that of the nation’s growth. Its income per capita reached about US$5,474 in 2018, more than doubling the national average.

The Southern Key Economic Zone also spearheaded some advanced manufacturing industries such as electronics manufacturing, software production, commercial services, logistics, finance, telecommunications and tourism. This is also the largest center of foreign direct investment (FDI) in the country with more than 15,000 valid FDI projects and a total of 140 industrial and export processing zones in operation. With impressive growth, the Southern Key Economic Zone not only contributes significantly to the country's economic growth but also supports and promotes socioeconomic development of surrounding localities.

However, according to experts present at the forum, over the past years, its strengths have not been fully tapped. Its economic growth is tending to slow down and there are still ‘bottlenecks’ that hinder regional connectivity and particularly hurt business development. VCCI President Vu Tien Loc said that current ‘bottlenecks’ are advantages of the Southern Key Economic Zone that are not fully tapped to create a new engine for growth; incommensurate infrastructure, unsynchronized connectivity; low quality of urban development, serious environmental pollution in many places; undersupply of qualified human resources; incomplete development mechanisms and policies; ineffective coordination mechanism among provinces and cities in the region; and localized development cooperation programs that are not synergized to unlock regional potential for more robust development. “It is important that the financial and managerial capacity restricts local companies from making full use of their capabilities and forming stronger connectivity. Therefore, to further tap local potential, more than anyone else, businesses must be placed at the center of economic development. In addition, to strengthen regional linkage, it is necessary to set up a regional council and a regional business council where businesses and their associations play a central role of connecting regional businesses,” said Dr. Vu Tien Loc.

Sharing the same view with Mr. Loc, Mr. Nguyen Hong Long, Deputy Director of the Steering Committee for Enterprise Innovation and Development, also affirmed that the business community plays an extremely important role in the development of the Southern Key Economic Zone and serves as a driving force of regional growth. Being clearly aware of the importance of businesses, the Prime Minister urged a focus on promoting internal resources, unlocking potential resources in society by speeding up new scientific and technological applications; underlined dynamic and innovative private economic development; and stressed the centrality of enterprises in generating development motivations, he said.

Dr. Tran Du Lich, Member of the Economic Advisory Group of the Prime Minister, said, to boost the true potential of the Southern Key Economic Zone, it is necessary to have disruptive innovations in economic development mindset, from ‘provincial economy’ to ‘regional economy’ through economic management and budget allocation mechanisms of the Government of Vietnam and local governments. Regional solutions must be planned. For that reason, when making regional planning under the Law on Planning, it is necessary to integrate regional development policies with the planning work. “In the near term, the Government must shape the trajectory for policies to impact the market and bring practical benefits to enterprises which are implementing actors,” he added.

My Chau