Da Nang on Right Track with Development

Da Nang on Right Track with Development

Vietnam's central Da Nang City is undergoing progressively robust developments in its industrialisation and modernisation processes. Over the past five years, the city’s economy has made many achievements. The industrial sector has increased in particular thanks to open investment policies.

From infrastructure changes

The foundation for economic development stemmed from the government and local authorities’ attention to infrastructure. Gross investment capital during the last five years (1999-2003) climbed up to over VND13 trillion, 92.9 per cent of which came from local capital sources.

Notably, Da Nang has succeeded in realising the policy of raising funds from land-use rights sales for infrastructure construction and urban area improvement. A series of key socioeconomic and civil works have been built and ameliorated. Several projects are under construction including a second software technology centre, an international exhibition and trade fair centre, a multi-purpose performance hall and 600-bed general hospital.

Vigorous economic growth

Da Nang city has shown steadily improving economic development. In 2003, its gross domestic product (GDP) growth rate stood at 12.62 per cent, a marked improvement from the figure of 9.5 per cent in 1999. The economic structure has also remarkably shifted as shown below:

Taking the lead in the economic structure, the city’s industry sector has shown a relatively high growth rate with industrial production increasing at an average of nearly 21 per cent per annum. Da Nang has continually produced high quality products such as garments, footwear, inner tubes, construction steel, cement, and processed fish products, satisfying the local market demand and becoming more competitive in foreign markets.

Furthermore, the city has developed an efficient software technology centre. Da Nang is also a centre of busy commercial exchange, with a proliferation of markets, supermarkets, agents and shops selling various goods.

A great number of local and foreign companies with Da Nang-based offices and distribution branches have created a bustling commodities and services market.

Total sales of goods during the past five years have risen by 11.1 per cent a year on average, of which the wholesale proportion occupies 74.5 per cent. The activities of services like finance, banking, insurance and transport have grown robustly, helping boost economic development. The sector of post and telecommunications has been swiftly expanded and modernised. By late 2003, telephone usage reached 13 sets per 100 people, a 300 per cent increase from 1998.

Thanks to good quality products and active market research as well as trade promotion activities, Da Nang’s export turnover has grown at an average rate of 15.2 per cent per annum over the period. In 2003, that figure was US$261.6 million, an increase of 16.56 per cent. More than 150 different products made in Da Nang have been exported to over 70 countries and territories throughout the world.

The performance of foreign direct investment (FDI) projects has become a vital part of the city’s economy. Over the last five years, Da Nang has attracted 37 additional FDI projects with a total investment capital of about US$170 million, bringing the total FDI projects up to 64 (worth more than US$374 million). In 2003 alone, after the successful Meeting of Investors, the city licensed 12 more FDI projects with registered capital of US$75.23 million.

In addition, during the past five years, Da Nang has restructured 39 State-owned enterprises (SOEs). The city has also enhanced its private and collective economy in order to further attract foreign investment. In 2003, it provided operating licences to 663 businesses and branches under Corporate Law. The city is now home to more than 3,000 private enterprises with gross registered capital of approximately VND4 trillion.

A stable society

The social structure and living standard of local people have been continuously improved. The school infrastructure has been improved to meet social requirements, specifically the construction of the well-equipped senior secondary school of Le Quy Don. Apart from public schools, the group of semi-public and private schools at all levels has been flourishing. To raise living standards, Da Nang has been meeting the task of hunger eradication and poverty reduction by encouraging economic sectors to further expand their production and services. It has generated jobs for around 93,000 people, decreasing the rate of households in poverty to 1.95 per cent in 2003, from 6.66 per cent in 2001. Coupled with the expansion of public healthcare system, Da Nang has acquired capital for increasing the number of private healthcare establishments, meeting the need for medical examination and treatment facilities.

Urgent tasks in 2004

Despite stable growth in the region during the past five years, Da Nang can see that the whole country is still facing enormous challenges. How can Vietnam compete against other countries in its accession into AFTA and WTO, etc? As one of the country’s most active economic centres, besides its internal development measures, Da Nang places an emphasis on enhancing its competitiveness in the international arena, building up trademarks and fortifying international cooperation.

The city will continue to work at improving the business and investment environment, speeding up the growth of industrial production, services, travel and tourism, and export activities. Da Nang plans to offer favourable conditions to develop projects including the combined group of fibre – textile – dyeing industries, steel plants, motoring accessory products, milk, glass production, processing aquatic products for export, and projects involving building infrastructure for tourism.

Additionally, it will boost the development of the science and technology markets and form linkages between science and technology, training, production and business.

Da Nang has been carrying out programmes which help enterprises make technological and equipment reforms, improve product quality, reduce expenses, form trademarks and so on. Agricultural development is closely linked with the expansion of the processing and services industries, especially handicrafts and farm economies. Da Nang will execute the Municipal People’s Committee action plan for tourism enhancement by intensifying investments into infrastructure, and diversifying into sea tourism and eco-tourism in Son Tra, Hai Van and Ba Na. It plans to build more guest-houses and villas at the tourist site of Ba Na – Suoi Mo, while at the same time providing assistance to investors for speedy implementation of world-class tourism projects. Furthermore, the city will step up the promotion of financial, insurance, auditing, sea and air transport services to create a harmonious and well-rounded economy.

Development plan in 2004