Motivating Investment Attraction and Economic Development

10:12:52 AM | 20/1/2021

To realize economic growth, investment and business development goals in the 2021-2025 period, Vinh Phuc province is making efforts to carry out programs and solutions to boost high competitiveness and improve the business environment. Mr. Le Duy Thanh, Chairman of the Vinh Phuc Provincial People's Committee, gives an exclusive interview to Vietnam Business Forum’s reporter on this matter. Hoang Tham reports.

Vinh Phuc has just wrapped up the 2015-2020 term with outstanding economic and investment development results. How will these achievements affect the 2020-2025 term?

During the 2015-2020 term, Vinh Phuc province achieved and exceeded all socioeconomic development goals, particularly in economic and investment development:

(1) High annualized economic growth of 7.1%, improved growth quality, annualized labor productivity growth of 8.38%; the economic scale in 2020 expanded by 1.56 times from 2015, accounting for 1.7% of the country’s GDP, the industry contributed 4.5% to the country’s industrial value; and State budget revenue of about VND30 trillion, ranked among top tax collectors in the country being one of 16 localities with high ratio of budget revenue sent to central authorities (47%).

(2) The investment and business environment was improved. The Provincial Competitiveness Index (PCI) always ranked high among provinces and cities. The province attracted US$2.8 billion of FDI capital and over VND56 trillion of DDI funds, 2 times higher than in the 2010-2015 period. New modern construction projects gave a facelift to urban areas. Some industrial parks were built, including Thang Long Vinh Phuc Industrial Park (250 ha), Ba Thien 2 Industrial Park (247 ha) and Dong Soc Industrial Complex (75 ha), making Vinh Phuc a reliable address for investors.

(3) Agricultural economy was reformed markedly to increase productivity, quality and efficiency. The rural appearance was comprehensively changed. The synchronous and spacious infrastructure was upgraded. All communes met new countryside standards. Environmental improvement and pollution abatement in residential areas gained great consensus among the people. Living environment quality in many rural areas and residential areas was raised and left ripple effects across the province.

These results were very encouraging, especially in the context that the world and domestic economy faced numerous challenges caused by the global COVID-19 epidemic from the beginning of 2020. That was also a foundation and a dynamic force for the province to achieve socioeconomic development goals and tasks in the 2020-2025 term set out in the Resolution of the 17th Vinh Phuc Provincial Party Congress.

The 17th Vinh Phuc Provincial Party Congress in the 2020-2025 term defined a number of key and cross-cutting issues about economic development: “Strongly reforming the growth model, with a focus on industrial and high-quality service development; clearing bottlenecks to attract investment and develop startup ecosystems.” Could you please tell us more about these issues? How will local authorities materialize them in the coming time?

The Resolution of the Provincial Party Congress defined economic development directions in the 2020-2025 term: Tapping and promoting all potential and advantages for development, with the focus placed on developing industry, service, tourism and value-added agriculture; fostering creativity, willpower and the aspirations of people for development; promoting entrepreneurship and innovation; unlocking new drivers for growth; rationally mobilizing, and effectively using resources for development; strengthening management, efficient and sustainable use of natural resources, protecting the environment and responding to climate change.

On that basis, the Provincial Party Committee also set the target that Vinh Phuc will become a developed industrial province by 2025, an industrial, service and tourist center of the region and the country; the GDP per capita will reach VND80-85 million; the urban infrastructure will basically meet first-grade urban criteria, with Binh Xuyen, Vinh Tuong and Tam Dao satisfying fourth-grade urban criteria. By 2030, it will become a developed province with synchronous modern socioeconomic infrastructure of a centrally run city; boost comprehensive and sustainable economic and social development; and bring the GDP per capita to VND130-135 million. The province will work out four categories with 29 specific targets, typically: economic growth of 8.5-9.0% a year; budget revenue growth of 6-8% a year; investment fund of US$2-2.5 billion of FDI and VND20-25 trillion of DDI in five years.

To accomplish the above objectives, Vinh Phuc defined five main groups of tasks and solutions and solved three breakthrough stages of (1) attracting and unlocking resources for economic and social development, with priority given to developing hi-tech electronics zones to make Vinh Phuc an electronic industry center of the country; (2) promoting urbanization along with new rural construction, creating fundamental changes in the appearance and quality of urban and rural areas and (3) improving the contingent of public employees and administrative apparatus.

As for economic development and investment attraction, Vinh Phuc determined to strongly reform the growth model, focus on industrial development and high-quality services; clear bottlenecks in investment attraction; promote transfer and application of science and technology; mobilize, attract and use resources effectively; selectively invest in important technical infrastructure, modern economic infrastructure, urban development towards modernity, together with carrying out the advanced new countryside construction program. Currently, by thoroughly disseminating the resolution of the 17th Provincial Party Congress, the Provincial Party Committee and the Provincial People's Committee are directing all levels, sectors and localities to concretize socioeconomic development programs and plans for the whole period and annual working programs. All programs and plans are required to clearly define objectives, targets, tasks and solutions, clearly assigning the responsibility of actions to leadership to achieve best outcomes.

For years, Vinh Phuc province has attached great importance to drastically directing investment attraction, effectively conducted good administrative reform, improved the business investment environment to create an attractive open, transparent investment environment, rated among the best in the class in the country. This was not only reflected in the high standings of the Public Administration Reform Index (PAR Index) and the Provincial Competitiveness Index (PCI), but also the presence of many big investors and corporations, enabling Vinh Phuc to develop dynamically with many development indicators topping the country.

The province also thoroughly understood and clearly determined that improving the business environment and enhancing national competitiveness is a constant and continuous central task, because if we stand still or reform slowly, it means we are going backwards and will be left behind. So, in the coming time, Vinh Phuc will continue to strengthen solidarity and unanimity of the entire political system, with faith, willpower and aspirations to go strong and complete socioeconomic development tasks and goals in 2021, consolidate the confidence of people and businesses, create a solid foundation for the successful implementation of annual and 5-year (2021-2025) socio-economic development plans and the 10-year socioeconomic development strategy for the 2021-2030 period.

The province will also firmly direct departments, branches and localities to implement consistent solutions for more substantive administrative reforms; renovate investment promotion to raise the efficiency; strengthen meetings and dialogues with businesses and investors to identify existing "bottlenecks" in access to land, premises and finance; persuade existing investors to recommend new investors to the province by siding with them in all aspects of business and investment operations. This will enable the province to generate strong impetus to boost investment attraction and business development.

Since the release of the Provincial Competitiveness Index (PCI) 15 years ago (2005-2020), Vinh Phuc province usually stood on the upper rankings table. Especially in the last 6 years, it always stood among Top 20 provinces and cities with best competitiveness. In the coming time, how will the province work to create new breakthroughs in improving the PCI and improve the investment and business environment more strongly and substantially?

Over the past 15 years, Vinh Phuc province has always strived to raise its PCI, better the business environment and create a strong driving force to attract investment funds and develop the economy. At each stage and in each specific year, the Provincial People's Committee issued and implemented plans and solutions for these purposes and, at the same time, required relevant agencies and localities to actively improve related component indicators, especially lowly ranked ones.

In the first four years (2006-2009), Vinh Phuc was a Top 10 performer among 63 ranked provinces and cities. In the next four years (2010-2013), it slid in the rankings due to negative fluctuations, standing at No. 43 in 2012. In the next three years (2014-2016), it returned to the Top 10 and secured a Top 20 position the last three years. In 2019, Vinh Phuc ranked 17th out of 63 provinces and cities, four places lower than in 2018, failing to reach the planned target.

Looking into PCI component indicators in previous years and 2019, the province found that some indicators improved more slowly than some leading provinces and cities. Reform and innovation policies relating to business and PCI performance did not produce transformational changes. Some component indices with high weight declined, and some indices did not get better scores and rankings due to slow reforms of administrative procedures and slow response to emerging difficulties faced by local companies as well as difficulties in land compensation and site clearance for investment projects, inadequate land policies and laws, and ineffective information on laws relating to investment environment.

To further improve component indicators that affect the overall score of the province, the Provincial People's Committee asked relevant agencies, sectors and localities to work out specific enhancement plans, especially for those with low scores and rankings such as access to land, legal institutions and security, equal competition, dynamism of the government, business support services, labor training and transparency.

With the drastic engagement to remove bottlenecks in site clearance and business support to access land with multiple advantages, Vinh Phuc province will enhance the operating quality of provincial and district public administration centers; foster information technology application to management and administration, launch online public services of Category 3 and Category 4 to the administration centers, and transparently publicize detailed planning on mass media. In particular, the province will continue to improve the effect of hotline operations and strengthen meetings and dialogues with investors and enterprises to promptly understand their problems and resolve them.

Confidently, with the great determination and effort of the Provincial People's Committee and local authorities for stronger administrative reforms and better administration, the province’s PCI will have a better performance in 2020 and beyond, thus creating a strong driving force for investment attraction and economic development.

Source: Vietnam Business Forum