Bac Giang Attracting Investment, Sustaining Development

10:44:48 AM | 10/9/2014

With constant efforts to tap local potential advantages and mobilise available resources for economic development, Bac Giang has gradually become an attractive destination for many domestic and foreign investors in recent years. The effective performance of investment projects has made huge contributions to local socioeconomic development, economic restructuring, State revenue, employment, and export. Vietnam Business Forum has an interview with Mr Trinh Huu Thang, Director of the Department of Planning and Investment, on this issue. Duy Anh reports.
According to the Resolution of the 16th Provincial Party Congress of the 2011-2015 term, investment attraction is No. 1 in the five industrial - service development programmes of Bac Giang province. What has this programme achieved thus far?
The investment attraction programme for industrial - service development acceleration in the 2011-2015 phase was approved by the Steering Board of the Bac Giang Provincial Party Committee, stated in Resolution 43/NQ-TU dated February 22, 2011. This is one of five socioeconomic development programmes of Bac Giang province in the 2011-2015 period.
Since the programme was launched more than three years ago, the province has attracted 247 projects, including 164 domestic direct investment projects with a total registered capital of VND10,545.1 billion (US$500 million) and 83 foreign direct investment (FDI) projects with a combined registered capital of US$1.599 billion. The average investment scale of domestic projects was VND64.3 billion in the 2011-2014 period and the average investment value of FDI projects was US$19.2 million.
The province is giving priority to projects requiring less land, using advanced technologies, exposing few risks to environment pollution, and likely paying big taxes to the State Budget. Big projects in the period included the US$1.12-billion touchscreen panel (TP), liquid crystal display (LCD) and liquid crystal display module (LCM) production project of Wintek Vietnam Co., Ltd, the VND1,625-billion Yen Dung golf course and service complex project of QNK Bac Giang Joint Stock Company, the VND250-billion Muong Thanh Bac Giang Hotel Complex of Dien Bien Construction Private Enterprise No. 1.
In industrial development, the province has achieved positive results in investment attraction for industrial development in the past three years. Industrial production value reached VND36,475 billion in 2013, nearly four times that of 2010 (the year before this programme was implemented). The value in the first six months of 2014 was VND20,340 billion. The province has established some key industrial products, including apparel, electricity, fertiliser and electronic components.
Trade and service projects in operation have contributed to promoting the development of the service sector. The average service growth was 8.77 percent in three years from 2011 to 2013 (specifically 9.1 percent in 2011 and 2012, and 8.1 percent in 2013). Service and retail revenue was over VND13,291 billion in 2013, almost two times higher than in 2010. In the first six months of 2014, the value reached VND6,790 billion. Export turnover amount to US$1.655 billion in 2013, as many as 2.54 times higher than the target set for the year by the development programme. The province expects to rake in US$2.1 billion from exports in 2014, as much as 2.8 times higher than the target set for 2014 by the development programme.
In the past three years, new investment projects generated 35,000 new jobs. They also increased financial contributions to the State Budget, specifically VND657 billion in 2011, VND773 billion in 2012, VND993 billion in 2013 and VND605.7 billion in the first half 2014 (expected to reach VND1,075 billion in 2014).
In the first six months of 2014, Bac Giang province attracted 19 FDI projects, more than twice the figure in the same period of last year. How has the province achieved this result? How has this result affected the development of Bac Giang?
The above result showed the proactive approach and effort of the province in investment promotion, particularly for FDI. The Department of Planning and Investment actively advised the Provincial People's Committee in building investment attraction orientation for the 2011 - 2015 period. Every year, based on actual results and on assessments of FDI trends in the region and in Vietnam, the Department of Planning and Investment consults the Provincial People's Committee to issue new investment promotion plans for the province. The Provincial People's Committee directs relevant bodies to actively prepare necessary conditions for contact, mobilise and support investors to study investment opportunities, complete investment procedures and carry out investment activities.
In addition, Bac Giang province actively assists FDI companies to deal with their difficulties emerging from production and business activities. Specifically, it supports investors with land compensation, site clearance, employment and administrative procedure handling. As a result, foreign investors have a friendlier look to the investment and business environment of the province and call other investors and partners to the province.
FDI is an important source of additional capital for local development investment and economic growth. Contributions of FDI projects in total social development investment tend to rise. In the 2011-2013 phase, foreign investors invested VND8,260 billion, accounting for 15.7 percent of total social investment capital. In 2013, FDI projects generated VND22,856 billion of industrial output value, accounting for 62.66 percent of the province’s total industrial production. The industrial output value of FDI projects reached VND13,660 billion in the first six months of 2014, accounting for 67.16 percent of the province’s total industrial output value. FDI projects have also helped boost its exports in recent years. In 2013, the export value of FDI projects was US$1.282 billion, accounting for 77.5 percent of the province’s total exports. Their export value reached US$703 million in the first six months of 2014, accounting for 80.4 percent of the province’s exports.
Employment is another important contribution of FDI projects. To date, FDI projects created more than 50,000 full-time jobs and tens of thousands of part-time jobs. Besides, the quality of local labourers is enhanced after they are employed by FDI companies.
In addition, FDI have helped expand relations with localities in South Korea, Taiwan and Japan and speed up regional and international economic integration.
The economic downturn dragged on many FDI projects in the province. What solutions has the province taken to deal with slowing progress of many ongoing FDI projects?
The slow progress of FDI projects results from various reasons. In Bac Giang province, the actual cause is land compensation and site clearance. To solve this problem, the provincial government has directed district governments and relevant bodies to actively support enterprises in land compensation and site clearance to bring their projects into production.
Besides, some companies adjusted their investment progress because of market fluctuations caused by the economic slowdown. Knowing this, the Provincial People's Committee embarked on supporting local businesses and investors to deal with their difficulties. Specifically, it held direct dialogues with investors to learn about their difficulties and obstacles in implementing their projects. Then, it directed tax authorities, banks, the Department of Planning and Investment, the Department of Natural Resources and Environment, the Department of Construction and other relevant agencies to propose specific measures to encourage and help investors when they carried out their projects in the province.
However, the province resolutely revoked investment licences from sluggish projects if they failed to give rational reasons. From 2011 to 2013, the province withdrew investment licences of 23 FDI projects because they failed to meet their investment commitments.