FDI in Da Nang: Changing for the Better

FDI in Da Nang: Changing for the Better

In recent years, the attraction of foreign direct investment (FDI) has seen significant results.  So far, the city has attracted a total of 66 FDI projects with a total investment of US$ 398.794 million. Total legal capital of the projects is put at US$159.91 million and total realised capital, US$156.827 million. Among 66 FDI enterprises, ten enterprises are building workshops and 38 enterprises have become operational. Their revenues were put at US$120 million in 2004, up by 6.5 per cent against 2003. Export turnover was put at US$85.25 million, up by 3.77 per cent over 2003. Major exports of FDI enterprises include footwear, textiles and garments, children’s toys, seafood, beer and wood products.

The Party Committee and authorities in Da Nang have always attached importance to FDI attraction in the city’s socio-economic development planning through 2010. The city is determined to improve the investment environment to attract and effectively use such resources. Recently, the city has issued Decision N⁰50/2004/QĐ-UB dated March 10, 2004 on policies and mechanisms for FDI attraction in Da Nang. In fact, the investment environment in Da Nang in particular and Vietnam in general has improved, especially on the legal aspect.

The city has tranferred the management of the Hoa Khanh and Lien Chieu industrial parks (IPs) from their developers, the Da Nang Partnership Housing Development Company and the Central Construction Corporation to new developers, the Da Nang IP infrastructure development and exploitation company under the Da Nang Management Board of IPs and Export Processing Zones (EPZs). Also, the city has used its budget to develop infrastructure to further reduce land rent. So far, the Hoa Khanh IP has had well-developed infrastructure facilities and the Da Nang IP infrastructure development and exploitation company is continuing to invest in the second phase of providing land to investors. The Lien Chieu IP has been created to relocate polluted production establishments. At the same time, the city will continue to develop the IPs of Thanh Vinh and Hoa Cam to have more land for investors.

Apart from the above-mentioned priority policies extended to investors, the People’s Committee of Da Nang has set up an investment promotion centre under the Da Nang Department of Planning and Investment to boost investment promotion activities and to implement the ‘one door’ mechanism to simplify administrative procedures.

Alongside the State’s policies on FDI attraction, Da Nang city has invested in infrastructure facilities, including the Lien Chieu-Thuan Phuoc road, the Bach Dang Dong road, the road from the Song Han bridge to the sea and the Dien Bien Phu street, and rebuilt its urban areas. The Hai Van tunnel, the Tuyen Son Bridge and Ngo Quyen road are under construction, let alone the ongoing upgrading of the Tien Sa seaport, the Da Nang international airport. The fact that the governments of Vietnam, Laos and Thailand are promoting the development of the East-West Economic Corridor will act as a driving force to promote FDI attraction in Da Nang in the coming years.

Local authorities have always promoted administrative reform, shortening the time for licence application for enterprises. This is also a good policy for attracting investment. The Da Nang Department of Planning and Investment has concentrated on helping enterprises overcome difficulties by asking for guidelines from authorised agencies and co-operating with relevant agencies to create favourable conditions for enterprises.  Periodic meetings with enterprises are held every six months, so that local authorities can get inputs and comments about mechanism and policy difficulties from enterprises, which are then reported to the Da Nang People's Committee and the Ministry of Planning and Investment.

At the same time, the city has assigned the Da Nang IP infrastructure development and exploitation company to build residential areas for workers in the Hoa Khanh and Lien Chieu IPs. Da Nang’s policies on worker training and trademark building support for enterprises have been effective.

Vietnam’s economy in general and Da Nang’s economy in particular have continued to gain a high growth rate. In 2004, the city’s GDP growth rate was put at 13.3 per cent. Also, a rapid change for the better has been seen during the industrialisation and modernisation process. The city is exerting and will make further efforts to promote investment in infrastructure development, helping enterprises quickly implement their projects after receiving licences, calling for more new and effective projects.