Attracting Investment Based on Triad of Economic Pillars

9:17:48 AM | 18/6/2024

Foreign direct investment (FDI) into Hai Phong City exceeded US$2.5 billion in the last three years (2021-2023). The breakthrough progress in improving the investment environment and effectively applying specific administrative mechanisms has created a huge advantage for the city in the race for FDI flows. At present and in the years to come, Hai Phong is resolved to attract more eco-friendly high-tech projects for three key pillars: High-tech industry, seaport - logistics and tourism - trade, that lead and drive sustainable growth.

To find out more about this issue, our reporter has an exclusive interview with Mr. Nguyen Ngoc Tu, Director of the Department of Planning and Investment, Hai Phong City.

Hai Phong City attracted US$253 million of FDI capital in the first quarter of 2024. Could you tell us more about this result?

Hai Phong City attracted US$253.35 million of FDI capital in the first quarter of 2024, fulfilling 12.66% of the full-year plan. Previously, in 2023, the city's FDI value finished the yearly target in just four months and reached US$3.62 billion in the year, ranking 2nd in the country. To date, valid FDI projects totaled 954, with an aggregate registered investment capital of US$30.06 billion. In 2024, the city aimed to lure US$2-2.5 billion of FDI capital.

Hai Phong City has drastically adopted many solutions to improve the business and investment environment, with focus on accelerating administrative reform, building electronic government, and enhancing the quality of public services. The city established a special working group responsible for removing difficulties and effectively supporting businesses and investors. The group is chaired by the Chairman of the Municipal People's Committee. In 2023, the city organized more than 100 dialogue conferences with domestic and foreign investors.

The Electronic Single-window System and online public services are deployed centrally and uniformly at all 35 municipal departments and districts, and all 217 communes, wards and towns. The system provides 1,703 online public services. 100% of eligible administrative procedures are provided completely online public service delivery.

In particular, from 2023, the city has adopted the results of the Public Administration Reform Index (PAR Index) and the District and Department Competitiveness Index (DDCI) as one of the criteria for public employe performance assessment and ranking. This assessment has motivated leaders at all levels and branches to make greater efforts to better the business climate and promptly meet the needs of businesses and investors.

Hai Phong city’s leaders award the investment license and flowers to representatives of LG Innotek Vietnam Hai Phong Co., Ltd

In addition to administrative reforms, the city has increased the investment fund for transport infrastructure, seaports, factories and warehouses. These will be strong premises and motivations for Hai Phong to assert itself as a desirable investment destination for investors in the coming time.

To fulfil its FDI investment attraction targets in 2024 and beyond, what should the Department of Planning and Investment advise the city?

The Department of Planning and Investment has focused on advising and carrying out key tasks such as:

Advising on the construction of action plans and programs to implement Hai Phong Master Plan for the 2021 - 2030 period, with a vision to 2050, approved by the Government. The master plan will open up new opportunities and impulses to help Hai Phong develop on par with leading cities in Asia and the world.

Researching, advising and proposing the project on the construction of a free trade zone in Tien Lang district inside the Hai Phong southern coastal economic zone (EZ) of Hai Phong. The project is expected to strongly leverage and awaken local economic development potential, build Hai Phong into a modern marine economic center, a connection center and a driving force for the development of the Red River Delta region, the northern region and the whole country.

Advising on the effective allocation and use of public investment capital; advising the Municipal People's Committee to launch the Investment Promotion Program, adopt selective investment and strengthen on-site investment promotion.

In addition, consistently carry out solutions to improve the business investment climate, link businesses into global production value chains where the city plays the role of a supporter and a “trusted matcher”.

According to the Master Plan for the 2021-2030 period, with a vision to 2050, Hai Phong is a major seaport city in the region and the world. The plan defines three development pillars: Seaport - logistics services; green, smart, modern industry; and international marine tourism center. Would you please tell us how the city promotes investment to achieve the above goals?

To make sure that all goals are targeted for the three economic pillars, investment attraction is determined to catalyze local potential advantages to selectively lure investors by industry, by field and by market as follows.

Further effectively investing in transportation infrastructure of all five types of commuting: Connecting roads, sea route, air routes, waterways and railways; calling for investment capital for infrastructure construction in industrial zones.

Implementing solutions for breakthrough administrative reform, accelerating administrative reform aligned with digital transformation.

Perfecting the high-quality human resource training system; strengthening connections between schools with businesses and investors to have a timely labor supply and meet requirements of businesses in an active and sustainable way.

Robustly drawing investment capital in affordable social housing projects and worker apartments, creating a premise for attracting workers from surrounding areas.

Actively reforming methods and improving investment promotion outcomes in many forms; actively prioritizing key economic sectors and projects with high added value that use advanced eco-friendly technology (bioindustry, new materials, renewable energy and modern engineering) and resource-saving technology; strengthening connection, supporting and creating cooperative links for sustainable development between domestic and foreign enterprises, increasing localization rate.

In addition, forming Hai Phong Southern Ecological Economic Zone. This is considered one of key and innovative tasks in the coming time. Currently, the Department of Planning and Investment and consultants are studying the implementation project and striving to complete the draft project by September 2024 and submit it to competent authorities for consideration, opinion and ratification.

What are the distinctive highlights of Hai Phong's investment attraction in the coming years? How has the city prepared to realize its economic growth, investment attraction and competitiveness improvement goals from now to 2030?

On July 8, 2019, the Standing Board of the Hai Phong City Party Committee issued Action Program 76-CTr/TU on implementation of Resolution 45-NQ/TW of the Politburo on Hai Phong construction and development to 2030 and further to 2045. The resolution states: “...Mobilizing most of local investment resources, with focus on private investment and FDI capital - an important resource to boost economic growth and create a sustainable budget source for the city.”

Every year, the Hai Phong City People’s Committee launches the Investment Promotion Program based on Party policies and State laws as well as central and local programs and plans; actively attracts selective domestic and foreign investment sources; strongly focuses on improving the business and investment environment, facilitating licensed projects to be executed quickly and smoothly; and provides quick and accurate information for investors to learn about investment and business opportunities.

Regarding investment attraction approach by industry and field, Hai Phong City issued a list of industrial projects that encourage investment, conditional investment and disapproved investment in the city to 2025 and to 2030 and the action program of the Hai Phong City People's Committee on perfecting institutions and policies, improving the quality and effect of foreign investment cooperation to 2030 to lay the groundwork for investment promotion and attraction.

With respect to market-based investment attraction approach, the city will continue to focus on expanding investment attraction from markets in the coming time as follows:

Domestic market: Priority is given to appealing large, reputable and well-branded corporations; well-reputed partners of domestic and foreign banks and investment funds; and successful investors in other localities seeking to invest and do business in Hai Phong; and successful, prestigious companies and investors in the city.

Foreign markets: Focus is placed on promoting and appealing investors from traditional markets such as South Korea, Japan, Singapore, Thailand, Taiwan, China, and Hong Kong. At the same time, Hai Phong City will boost investment promotion in the United States and European markets and attract businesses from countries interested in Vietnam’s entry into bilateral and multilateral free trade agreements. The city will take advantage of foreign investment flows redirected out of major markets in the region.

Hai Phong City will continue to work to expand and attract investment capital from strategic markets such as Northeast Asia and Southeast Asia. Besides, the city will eye the US and European countries to diversify FDI sources as well as facilitate technology transfer and cooperation with domestic companies.

Amid increased competition to draw investment flows, in addition to its innovative and active investment promotion activities, Hai Phong is always well-prepared to enable investors to start their investment immediately. In particular, the city will focus on speeding up the progress of building modern infrastructure in industrial parks and economic zones, connecting the city’s traffic routes and with neighboring localities in the most convenient way.

Hai Phong utilizes all available advantages of a coastal locality. With its right approach with focused investment attraction, the city will continue to develop, work to realize its goal of becoming an international marine economic center in Southeast Asia region.

Thank you so much!

Ngoc Tung (Vietnam Business Forum)