In 2014, with various changes in the world economy, the Vietnamese economy revived even with potential risks affecting the business community. Under such circumstances, Ha Tinh province has adopted several policies and improved business environment to maintain production and attract investment. As a result, the province has successfully joined the top list in attracting investment. Vietnam Business Forum interviewed Mr Hoang Van Son, Deputy Director of Ha Tinh Planning and Investment Department. Hoang Tinh reports.In recent years, in spite of world economic recession, Ha Tinh continues to attract investment, joining the leading group and occupying the 6th position in FDI. How do you evaluate this success?
So far, Ha Tinh has attracted 370 investment projects, domestic and foreign, with total capital of over VND425 trillion (US$20.5 billion). The number of businesses has also increased to over 4,000 (including business branches and representative offices). In 2014 alone, there are 500 new businesses with registered capital of VND3,058 billion.
The province has 315 domestic investment projects with total investment capital of over VND74 trillion and many projects are under operation including big projects such as Vung Ang Power Station 1, petroleum and LPG storage, Saigon brewery and Hong Linh yarn plant.
For FDI projects, 10 countries and territories have invested in Ha Tinh, including Taiwan, Japan, South Korea, Brunei, Australia, USA, Thailand, the Philippines, Laos and China. Ha Tinh ranks 6th among Vietnamese provinces in FDI. 55 projects have investment licenses with total capital of over US$16.5 billion. Some foreign investors are planning large investment projects such as Formosa group with oil refinery project worth US$12 billion, Mitsubishi with Vung Ang Thermal Power Plant II of US$2.5 billion, and Samsung with Vung Ang III.1 and III.2 of over US$5 billion.
Foreign investment plays an important part in the economic development and restructuring of Ha Tinh. The improvement of the business environment has successfully attracted big investors. The province has upgraded its business assistance policy with better legal framework for FDI.
In face of the fast-increasing international integration, Ha Tinh businesses have shown their strong points:
Though the prolonged world economic recession posed strong pressure on their business activities, Ha Tinh businesses continue to develop in both size and number. The number of new enterprises joins the leading list of the country. In 2014, there were over 500 new enterprises with larger size and increasing 5.6 times in manufacturing and 5.5 times in capital.
With more large-scale projects in the province, local small and medium-sized enterprises (SMEs) have more opportunities to develop supporting industries, services and logistics.
The restructuring and equitisation of State-owned enterprises (SOEs) have been implemented in line with the road map set by the Prime Minister. In 2005, Ha Tinh had 49 SOEs (35 under provincial ownership). At present, there are only 10 SOEs (6 of 100 percent state ownership). More importantly, after being equitised, they have increased business efficiency, such as Ha Tinh Mineral and Trade Corporation.
There are, however, remaining weaknesses:
The number of enterprises increases but large enterprises remains few, dominated by SMEs splitting up from local key sectors, potentials and advantages. Many enterprises are without business strategy, production plan, long-term and efficient development, making it impossible to access capital resources. Meanwhile, weak financial and business management fail to develop business linkage and partnership.
Ha Tinh ranked 35th in 2012 and 45th in 2013 in PCI, in the average group. What is the plan of the province to improve PCI in the coming years?
In fact, PCI of the province is unstable. In 2006-2008, it was in average group, in 2009-2010, it increased to fair and 2011 up to 7th among 63 cities and provinces. By 2012 it was down again to 35th and 45th in 2013 among average group.
Meanwhile Ha Tinh has maintained high economic growth rates of 11.68 percent in 2011, 13.44 percent in 2012, 19.2 percent in 2013 and expecting 25.89 percent in 2014. Budget revenue increased from VND1,000 billion in 2010 to VND5,600 billion in 2013 and VND12,000 billion in 2014. The investment attraction ranked 6th in Vietnam and rural development plan recorded high evaluation from the central government.
In an effort to develop a truly favourable, transparent and equitable business environment upgrading and maintaining high PCI, Ha Tinh People’s Committee has adopted Action Plan 188/KH-UBND of May 23, 2014 focusing on the following measures:
One, public education of Resolution 19/NQ-CP of March 18, 2014 of the government on main solutions to improve business environment and increase national competitiveness together with related documents and regulations of the province.
Two, to accelerate the economic restructuring together with high growth models increasing quality, efficiency and competitiveness in 2013-2020 period, to develop cohesive infrastructure, economic and industrial zones as planned, and to promote domestic and foreign investments.
Three, to develop high-quality human resources, training 20,000 workers a year for Vung Ang economic zone, other projects and labour export, expanding training centres in conjunction with large enterprises such as Hung Nghiep FORMOSA Ha Tinh Ltd, Co. and others in economic zones to upgrade the skill required at enterprises; to ensure that Ha Tinh University capable of training, research and application of high technology and Viet-Duc training school a model of the province central region.
Four, to develop enterprises applying related law and policy as well as plan, strategy and socio-economic mechanism of the province, to improve policy supporting, encouraging businesses and removing their hurdles.
And, to accelerate administrative reform, improving formalities, shortening time delay especially in land, taxation, financing, customs, health, education, import-export, science-technology, labour, social welfare, visas, residence, inspection and court; to improve administrative reform, apply information technology in State management and upgrade staff members.
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