25 Years of FDI Attraction: Remarkable Achievements

11:14:42 AM | 5/12/2019

The year 1993 marked an important milestone with the first FDI projects licensed in Tay Ninh province. Now, after over 25 years, Tay Ninh has become a leading light on the country's investment attraction map as it stands among the top 10 recipients of FDI value in Vietnam. The following interview with Mr. Trinh Ngoc Phuong, Director of Tay Ninh Department of Planning and Investment, will provide more information about this impressive achievement. Cong Luan reports.

Could you highlight the FDI attraction achievements of Tay Ninh province over the past 25 years?

On December 29, 1987, the Law on Foreign Investment in Vietnam was adopted by the National Assembly for the first time. As this law came into effect, the investment market of Vietnam in general and Tay Ninh in particular was still new to FDI investors. In the period of 1987 - 1992, Tay Ninh province did not receive any FDI projects.

In 1993, Tay Ninh officially licensed the first two FDI projects with a combined registered capital of US$3.85 million. With over 25 years of ongoing efforts to improve the investment environment, the province has now become the second home and an ideal destination for FDI enterprises. As of December 31, 2018, the province had 291 FDI projects with a registered capital of US$5,782.15 million from 29 countries and territories. The disbursed fund reached about US$3,149.16 million, accounting for 54.46% of the total registered value.

Over the past 25 years, Tay Ninh has experienced twists and turns in FDI attraction, with the boom in the period of 2016 - 2018 when it drew 81 FDI projects with US$2,563.54 million. In addition to courting fresh FDI projects, the province has focused on persuading existing investors to increase their investment value by providing them with the best conditions to carry out and operate their projects and promptly removing hardships against them. Thus, many have greater trust in the province and pledge to increase their investment to scale up business operations. In 2016-2018, up to 86 FDI projects increased by US$1,061.28 million of investment capital.

From an agriculture-based economy, the province has increased service and industry proportion to 75% of gross regional domestic product (GRDP). In fact, the FDI sector plays an important role and has a great impact on development, making an important contribution to local economic growth. Specifically, the import and export value of FDI projects has seen stable increased year by year. The import and export value of FDI projects rose from US$181.24 million in 2002 to US$6,894.1 million in 2018.

Most FDI projects are enjoying tax holidays and their contributions to the local budget are insignificant, but this source of income grew steadily in recent years. Specifically, the FDI sector paid VND17.29 billion to the State budget from their local business operations and VND727.95 billion in 2018. Not until 2006 did import and export activities of FDI companies start to have taxable incomes. They paid VND21.16 billion to the state budget in 2006 and VND409.87 billion in 2018. FDI projects have helped restructure the local economy towards industrialization and form some key industries such as yarn, textile, garment and footwear. The FDI sector accounts for 21-31% of the province’s total development investment fund.

FDI projects have also significantly created jobs for local workers and helped raise incomes and livelihoods of local people. While FDI projects employed 4,043 laborers in 2000, the figure jumped to 135,333 in 2018

How have you carried out policies, decentralized authority and coordinated State management of foreign investment?

We have applied mechanisms and policies according to laws, decrees and circulars issued by central authorities. The effective decentralization of investment management to departments, branches and localities has boosted foreign investment activities and reduced time and cost spent by investors, thus strengthening their trust (investors in economic and industrial zones will work with the Economic Zone Authority and investors outside economic and industrial zones will work with the Department of Planning and Investment). In addition, we have constantly sought for solutions to improve the investment environment, such as accelerating administrative reform, carrying out the single-window mechanism, building a public administrative center, reviewing planning, providing timely support for investors, and directing the coordination of relevant departments and branches in investment management.

Another outstanding achievement of Tay Ninh province is the improved performance of Provincial Competitiveness Index (PCI). Could you tell us more about this success?

The ongoing innovation, creativity, responsibility and dedication to support investors have helped Tay Ninh win the trust of investors. In 2018, its PCI climbed five places, ranking 14th out of 63 provinces and cities to stand among good performers, the highest position it had ever achieved.

This outcome illustrated the confidence of the business community through the competitiveness assessment survey on administration performance of local government. This impressive achievement also showed the determination of the provincial leadership in administrative reform, strong improvement of the business investment environment, and support for business development of enterprises and investors. In combination, Tay Ninh is capable of drawing large-scale projects.

From this foundation of success, with the high determination of the entire political system to deal with shortcomings, create a strong transition in administrative reform, and strongly improve the investment environment, we will work to improve PCI, aiming to become one of the best performers in the country in 2020.

Could you please tell us more about your FDI attraction, management and employment orientation?

We will focus on improving the quality and effectiveness of investment attraction in accordance with the province’s socioeconomic development orientation in the 2016-2020 period, give priority to projects using advanced environment-friendly technologies and efficiently using natural resources and land. We will concentrate on supporting industries, agricultural support industries, locally advantageous services, information technology, science and technology services, education and training, infrastructure, and processing industries.

The province restricts investment projects that are not involved in manufacturing, increase the trade deficit or do not process virgin materials; refuses projects that wastefully use energy, resources, use outdated technologies, or cause environmental pollution. For industrial parks, the province adopts the industrial - service - urban area model where industrial parks act as a core to form the associated urban area, accelerate urbanization process and stimulate service development. In turn, the urban area and the service are supporting logistics for industrial production development.

What key solutions will you focus on to improve the quality and effect of FDI inflows?

The provincial government will continue to pay attention to directing relevant bodies of all levels and branches to raise the sense of responsibility, creativity and innovation to create an open, dynamic, transparent, accountable and effective business investment environment, speed up information technology application to settling administrative procedures and creating a breakthrough in style, service attitude, prestige and trust in the business community. We will effectively apply preferential and incentive policies while tightening inspection and supervision to make sure that FDI enterprises comply with their investment commitments, adhere to criteria and conditions to receive preferential treatment and achieve more favorable business development.

At the same time, we will continue to apply the single-window mechanism to investment and one-place single-window mechanism to business registration; strengthen dialogue with investors, promptly remove their difficulties and problems arising in production and business activities, and further improve on the PCI Index to stand among the Top 10 best performers in the country in 2020.

In addition, we will focus on resolving the following relations:

- Improving infrastructure quality, especially traffic infrastructure like roads, river ports, airports, inland dry ports, international airports, particularly blueprint Long Thanh Airport, and promoting the Trans-Asia Road linked to Thailand, Laos and Myanmar.

- Facilitating logistics and dry port service development

- Strengthening human resources: Improving worker skills to meet recruitment needs of enterprises.

- Ensuring political security, social order and safety, creating a firm confidence of businesses and investors investing in the province.

Thank you very much!