3:54:13 PM | 3/9/2014
In reality, many provinces have similar characteristics and conditions in geographical location, natural resources, cultural and historical values, but have different attractiveness to investors. This demonstrates that what attracts investors are not only ‘hard’ advantages but also the creativity and flexible application of mechanisms and policies and the effective governance of local governments. Vietnam Business Forum’s reporter has an exclusive interview with Mr Nguyen Van Quang, Chairman of Hoa Binh Provincial People's Committee, on this issue. Kieu Trang reports.
How do you assess economic performance in Hoa Binh province in 2013 and the first six months of 2014?
In 2013 and the first six months of 2014, Hoa Binh province carried out the Socioeconomic Development Plan in the context of global and domestic economic economy notwithstanding numerous difficulties and challenges. However, the high determination, lucid leadership and guidance of the Provincial Party Committee, the Provincial People's Council and the Provincial People's Committee; the timely and effective supports of central authorities; and the efforts of local authorities and all economic sectors, the province’s economy achieved positive results.
In 2013, Hoa Binh province saw GDP growth of 10.24 per cent, GDP per capita of VND20.74 million (US$1,000), State budget revenue of VND2,116 billion (US$100 million), and 15,500 workers new jobs generated. National defence, political security, social order and safety were guaranteed. In 2014, the province expected economic growth of 7.51 per cent. In addition, the consumer price index was forecast to rise 1.45 per cent in the first six months, interest rates continued to decline, and credit outstanding increased by 2 per cent from the start of the year. Exports were estimated to reach US$64.588 million in six months, up 56.93 per cent year on year. State budget revenue rose to VND1,029 billion (US$50 million), higher than that in the same period of 2013. The production value of agriculture, forestry and fisheries climbed 2.9 per cent, while industrial production index leaped 9.72 per cent year on year in the reporting period. Inventories dropped while many companies resumed operations (As of June 30, 2014, as many as 354 companies ended operations, a decrease of 547 companies from the start of the year).
However, companies faced capital shortage and slow sales. Credit growth was low and total social investment was modest. Purchasing power was slowly recovered. Agricultural growth was low. Employment, income and livelihood of people, especially the poor, did not improve much. Technical infrastructure remained poor and severely degraded. These generally affected investment attractiveness of the province.
While ‘hard advantages’ like geographical location, natural resources and cultural and historical values that all localities always try to affirm are losing the interest of investors who are always wary of new projects amid economic turbulence, should the generation of ‘soft advantages’ in mechanisms and policies be considered optimal methods to increase the attractiveness to investors?
As a gateway to Hanoi, the capital of Vietnam and a part of Capital Zone Planning, with the culture imbued with national identity, rich natural resources plus a system of eight industrial zones (set up at the approval of the Prime Minister) and a lot of small industrial complexes, Hoa Binh province has sufficient favourable conditions to attract investment capital. However, the province does not see them as absolute advantages, but deems them important to the improvement of investment and business environment and the construction of business-friendly mechanisms and policies. Accordingly, the Provincial People's Committee issued Decision 04/2011/QD-UBND dated April 21, 2011 on regulations on investment management and encouragement in Hoa Binh province and Decision 63/QD-UBND dated January 20, 2014 on regulations on sequential orders of settling administrative procedures for investment projects using land outside industrial zones in Hoa Binh province. These laid the framework and foundation for fulfilling project investment procedures in the province.
The creation of ‘soft advantages’ in mechanisms and policies, that is to say, administrative procedure reform to reduce the amount of time required to get things done and abolish barriers and obstacles in administrative procedures concerning project assessment, investment licensing, business licensing. The province will improve professional and ethical qualities of officials and civil servants at the service of investors. All these factors effectively improve economic administration of the provincial government, bring a lot of benefits to investors, generate a friendly investment and business environment, and enhance transparency in line with international integration trends. The effective application and amendment of State policies help create comparative advantages, create a healthy competitive environment, and strengthen the draw on investors.
Despite its positive achievements in socioeconomic development, the provincial competitiveness index (PCI) of Hoa Binh province was not high. Why did Hoa Binh suffer that result? To raise the PCI ranking in 2014 and subsequent years, what solutions will the province take?
Standing at 62nd position out of 63 provinces and cities was obviously very low, particularly for a province serving as a gateway to Hanoi, the capital of Vietnam. This is also a huge concern of provincial authorities. In addition to objective reasons like infrastructure, economic starting point and limited awareness of businesses, the low ranking was attributed to cumbersome, overlapping and unclear administrative procedures; improper and unfocused information and communication; low dynamism of State agencies; and low capabilities of civil servants. Although the province issued Plan 43/KH-UBND dated August 1, 2013 on the construction of specific roadmaps for PCI improvement, the implementation by local authorities was ineffective.
Being aware of this, to gradually better the investment and business environment and enhance governance, the provincial government will focus on carrying out many synchronous measures to improve PCI component indices like market entry costs, unofficial charges, land access, information transparency, and proactivity of provincial government; step up administrative procedure reform, build infrastructure; issue mechanisms and policies on investment and business encouragement, and promulgate resolutions on implementation of measures to improve investment and business environment and enhance PCI.
Besides, the provincial government will assign duties and tasks to responsible officials and units, and raise responsibility and service quality of officials. It will also accelerate the establishment of Hoa Binh Business Association to form a reliable bridge for the provincial government and the business community. In particular, Hoa Binh will set up a telephone hotline directly connected to the Chair of Provincial People’s Committee to timely receive and resolve proposals from businesses and investors.
With the motto "Businesses are the citizens of Hoa Binh province and successes of businesses are also those of the province,” provincial leaders are determined to flexibly apply State policies based on local realities, and quickly resolve difficulties against enterprises.