Key Economic Regions Must Take Lead in Economic Recovery

9:49:35 AM | 6/1/2020

Provinces and cities in key economic regions must take the lead in recovering economic development as the Covid-19 pandemic has been controlled, especially in attracting investment from large corporations and transnational companies with leading technological capabilities.

This is the affirmation of the Prime Minister Nguyen Xuan Phuc at the meeting of permanent cabinet members on the development of key economic regions. Therefore, the leaders of localities in the region need to uphold responsibility for regional economic development, be truly devoted to the development of the whole country, the whole region and each locality.

Growth drivers of the country

According to a report by the Ministry of Planning and Investment, in the 2011-2019 period, the GRDP of the four key economic regions increased by 7.25% on average per year. GRDP scale of all 24 localities in four key economic regions as compared to the national GDP is over 70%. Hanoi and Ho Chi Minh City are the two important growth poles of the country, contributing to the average national growth of the year in the period of 2011-2019, respectively 13.08% and 19.9%.

In addition, the study shows that for every 1% of growth in the four key economic regions, the GDP of the entire economy will increase by 0.61%, of which the key economic regions of the North and the South will be the two greatest contributors. Specifically, an increase of 1% GRDP in the Northern key economic region makes GDP of the whole economy increase by 0.49%; an increase of 1% in GRDP of the Southern key economic region makes the GDP of the whole economy increase by 0.55%.

Currently, the key economic regions are the largest hubs for sea and air transportation, with 6 out of 8 national seaports, accounting for 93% of the ports’ loading capacity and 100% of the international airports, with an average capacity of about 25 million passengers per year. Besides, connecting projects in the region create spillover effects, such as transportation projects, tourism and logistics development chains, developing high-tech and price-intensive industries with great added value, and projects to prevent drought, saline intrusion and adapt to climate change.

Therefore, Prime Minister Nguyen Xuan Phuc requested the Ministry of Planning and Investment to coordinate with other ministries and localities to urgently elaborate and finalize the regional and provincial planning within the national master plan. The requirement is to carefully and thoroughly review all fields to address current problems.

Representatives of four key economic regions (Hanoi, Ho Chi Minh City, Quang Nam and Kien Giang) reported on the implementation of the Prime Minister's conclusions on economic development in key economic regions. Accordingly, some suggest that in the long term, there should be a law on development of key economic regions, in order to remove difficulties, clarify the role of the regional council, as well as the mechanism for mobilizing and allocating resources. Provinces and cities also affirmed that this year's growth target and budget revenue can be achieved, a good sign in leading the regional economic development.

Maximizing the role of regional council

Regarding the institutional development of the key economic region, according to the Prime Minister, there are many bottlenecks to be removed. However, it is necessary to have appropriate measures and roadmap. The immediate action is to maximize the role of the regional council. The Prime Minister asked the Ministry of Planning and Investment to review and propose to the Government suitable mechanisms so that localities in the key economic region can take advantage of their potential strengths, while not competing against and weakening each other.

For each specific key economic region, Prime Minister Nguyen Xuan Phuc stated that the Northern key economic region with the focus on the "development triangle" including Hanoi, Hai Phong and Quang Ninh, has good conditions to attract investment in high-tech and processing industry, manufacturing, electronics, services, banking and finance, logistics and high-tech agriculture. It also has strengths in human resources, forming research centers to apply high technology.

The central key economic region focuses on strong development of the marine economy, the development of automobile ecosystems and transportation services, especially tourism. There should be a project to develop tourism in the Central region in combination with the Central Highlands to create a key region.

The Southern key economic region must focus on attracting large-scale and high-tech investment; promote the leading role of Ho Chi Minh City to make this region a growth driver in 2020 and the coming time.

In addition, the Key Economic Region of the Mekong Delta has many potential and advantages but the development level is not high. It is necessary to strongly develop hi-tech agricultural industries, especially key agricultural products such as shrimp, catfish, fruit and processing industry. The region must implement Resolution 120/NQ-CP on sustainable development of the Mekong Delta, coping with climate change.

In addition, in promoting investment attraction, Prime Minister Nguyen Xuan Phuc suggested that regional and local councils take advantage of the opportunity of successfully controlling and fighting the Covid-19 epidemic, to promote production and business activities. Key economic regions, especially economic centers, must be investment attraction destinations, taking the lead in the movement of regional and global investment flows.

“We must turn challenges into opportunities, resolutely not cause difficulties for investors and businesses. We must implement preferential policies to support credit, electricity, water, transport infrastructure, logistics services, especially manpower, to serve the needs of large-scale and high-tech projects,” the head of the Government emphasized.

By Ha Linh, Vietnam Business Forum