Nghe An Creating Strong Foundation for Economic Development

In 2011, 2012 and the first six months of 2013, the world economic situation continued to develop complicatedly. Rising domestic production costs, tightened monetary and fiscal policies, shrinking market, weakening demand, enlarging inventories, high deposit and lending rates, and increasing corporate bankruptcies and stagnancies restricted the province’s economic development. However, with the support of the Politburo, the Government, ministries, central agencies, Provincial Party Committee and Provincial People's Committee, in recent years, the Department of Trade and Industry has been drastically implementing programmes like opening the Nghe An electronic community exchange (ecna.vn), organising the Nghe An International Trade Fair 2012, bringing Vietnamese products to country and mountainous areas, and deploying an energy conservation programme.

 

These programmes have spurred the robust development of industrial and construction sectors, with an average annual growth of 22 percent. In 2012, the province obtained industrial and construction production value of VND12,550 billion. The industrial and construction sector’s contributions to the GDP rose 18.9 percent in 2000 to 29 percent in 2005 and 33 percent in 2011. Cottage industries in the country also strongly expanded. Bamboo and rattan crafting, seafood processing, woodworking and cloth-making generated stable jobs for thousands of local workers.

 

Handicraft production value increased on average 18 percent a year. Currently, the province has 96 handicraft villages. Industrial promotion helped localities and organs to access State policies.

 

The province also achieved good export results. Despite difficulties, export remained a bright economic spot in 2012. The export turnover reached US$522.25 million in 2012, up 8 percent over 2011. The value was 30.5 percent higher than the target set for 2012 (US$400 million). In particular, commodity exports valued US$257.83 million, up 13.1 percent year on year and 17.2 percent above the full-year plan. In 2012, the province had 146 exporters, an increase of 22 companies over 2011, of which 48 companies posted turnover of US$1 million onward and 23 companies raked in US$3 million or more. Notably, Thanh Thanh Dat Co., Ltd earned US$44.26 million from exports; Bac Hong Lam Trading Joint Stock Company raked in US$14.33 million; Nghe An Import Export Joint Stock Company fetched US$11.16 million; Viet Trung Xuri Seafood Co., Ltd earned US$11.8 million; and Vietnam Laos Investment and Technical Support Joint Stock Company posted US$11.66 million.

 

South Korea is one of the largest investors in Nghe An at present. As of June 2013, South Korea had 11 valid investment projects with a combined registered capital of US$60.97 million and employed more than 10,000 local workers.

 

Nearly 20 Nghe An province-based enterprises exported more than US$16 million of goods to South Korea in 2012 and nearly US$5 million in the first four months of 2013. Nghe An’s key exports to South Korea consisted of stone, scrap aluminium, apparels, resin, wood chips, chilli, onion and garlic.

 

Nghe An province imported over US$30 million worth of goods from South Korea in 2012 and US$12.7 million in the first four months of 2013. The province’s major imports from South Korea included plastic materials, plastic granules, machinery, automotive and motorbike parts and paper.

 

The province expected to draw more South Korean investors to do business in Nghe An, particularly companies operating in South Korea’s strong industries like supporting industries, electronics, refrigeration and high tech. The province also hoped that this event was a chance for Nghe An enterprises to seek South Korean partners to boost export and formulate business links with South Korea partners to boost production and business activities.

 

The provincial competitiveness index (PCI) of Nghe An province indeed kept going up in the past years, from the 56^th place in 2009 to the 54^th position in 2010, the 49^th position in 2011, and the 46^th place in 2012. This progress was an encouraging result.

 

This showed the continuous efforts of authorities and organs at all levels to improve competitiveness and create a favourable investment and business environment. That was evidenced by investment results in Nghe An in 2011 and 2012. Nghe An province licensed 55 investment projects in 2011, including two FDI projects (a US$11.6 million leather and apparel product manufacturing project invested by Prex Vinh Co., Ltd in Lac Son Industrial Complex, Do Luong district, and a US$5 million children’s toy production factory invested by Matric Vinh Co., Ltd in Bac Vinh Industrial Park.) In 2012, the province granted province licences to 62 projects, including 59 domestic investment projects and three FDI projects (US$350,000 Viet Han food production factory invested by Viet Han Food Export and Import Company; the US$30 million Hitech BSE Vietnam telecom and electronic equipment and parts production plant invested by BSE Vietnam Electronics Company in Nam Can Industrial Park; and US$550,000 wood processing project invested by Tan Viet Trung Artificial Chipboard Joint Stock Company in Nam Cam Industrial Park.)

 

In the past years, Nghe An province has spared no effort to attract and roll out the red carpet to invite investors. To build an investor-friendly investment environment, the province needs the concerted efforts of all organs and individuals. They need to do the following jobs:

 

- One: canvassing and raising awareness of leaders at all levels and civil servants, especially in units relating to the PCI performance; adding PCI to discussion contents of meetings of authorities at all levels.

 

- Two: continuing to deploy robust and extensive public administration reform (from thinking and perception to action); deploying one-stop source mechanism to reduce waiting time for investors when they complete investment procedures, enhance the quality of public service.

 

- Three: timely reviewing, adjusting, supplementing and disclosing policies and planning (socio-economic development planning, land-use planning, construction planning, and industry planning) to facilitate investors and enterprises to access information and opportunities of investment and business in the province.

 

- Four: meeting, exchanging and listening to feedback from grassroots authorities and enterprises to seek solutions to difficulties and problems against enterprises through websites or telephone hotlines (each agency has its own website) and perfecting policies and mechanisms.

 

- Five: improving the advice quality of professional bodies and strengthening direction, control and supervision of the provincial leadership to eradicate limitations and weaknesses in the investment climate.