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Central city grapples with FDI challenges

Update: December, 09/2013 - 08:46
The General Director of Future Technology company, Robert Kramreiter, said that difficulties in import and trade procedures and insufficient legal frameworks were among Da Nang's major disadvantages in luring investments.—Photo sgtvt

DA NANG (VNS)— Poor supportive industries and materials, a poorly-trained labour force, high transport fees, limited land locations for industrial parks, complicated procedures for customs and taxes, as well as an ineffective East-West Economic Corridor, remained barriers in luring foreign investors to Da Nang.

This was admitted by chairman of the city's People's Committee, Van Huu Chien, during a meeting with foreign investors last Friday.

Chien said current shortcomings ranked the city at 17th out of 53 cities and provinces nationwide in attracting FDI projects.

"Having attracted 279 FDI projects with capital of US$3.31 billion, the city has yet to promote its capacity in appealing to more investors due to restrictions in procedural reforms and policy flexibility," Chien said.

"The city has seen a sharp increase in foreign investment over the past 11 months, with 36 new FDI projects totaling $291 million, as 15 projects raised their total investment capital, but they are still small-scale investments," he said.

He also said the city would create a strategy to renew foreign investment in the city by designating next year as the Year of Enterprises.

The General Director of Future Technology company, Robert Kramreiter, said that difficulties in import and trade procedures and insufficient legal frameworks were among Da Nang's major disadvantages in luring investments.

"The city should provide preferential duties for consultant or technological investors in the field of renewable energy, and develop exemptions on import taxes for green energy projects," Kramreiter said.

"The city administration should also propose market-based pricing mechanisms for electricity consumption, in order to encourage investors in power generation," he added.

Nguyen Thi Thanh Dung, assistant director of Indochina Capital, said untreated wastewater spoiled the beach environment near resorts and hotels on roads linking Da Nang and Hoi An.

"Seven of 15 discharging gates of wastewater into the sea have yet to be treated. It will soon pollute the environment around resorts and public beaches nearby. I require the city to speed up the wastewater treatment project for coastline roads along Truong Sa and Hoang Sa to create a clean and fresh environment for tourism projects," Dung said.

She also suggested that the city boost long-term tourism promotion and marketing strategies.

"The city only maintains a small budget of US$50,000 for tourism marketing and promotion. Meanwhile, Da Nang airport, which was newly upgraded, has been overloaded with four million passengers per year and 16 international flight routes," she said.

She added that the city should replace visa applications with visa on arrivals to attract tourists.

Alexander Willam Lowther, general manager of Viet Nam Brewery Limited, said stable economic growth, infrastructure upgrade and inflation control would play crucial steps in attracting investment.

He noted that the city should develop strategies to save energy and cope with climate change for long-term sustainable development.

In the latest report, FDI enterprises reached an export turnover of $654 million in the first nine months of the year, a third of the city's total exports, creating over 38,000 jobs with an average monthly income of VND3 million ($143) per capita.

The city hosted 2.7 million tourists this year. — VNS

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