HCM City’s economic recovery on right track

February, 25/2022 - 10:30

Prof Dr Trần Hoàng Ngân, director of the HCM City Institute of Development and Research, said HCM City should foster supporting industries, speed up public spending, remove institutional bottlenecks, and take advantage of the recently approved economic stimulus package. 

 

Prof Dr Trần Hoàng Ngân, director of the HCM City Institute of Development and Research. VNA/VNS Photo

Prof Dr Trần Hoàng Ngân, director of the HCM City Institute of Development and Research, said HCM City should foster supporting industries, speed up public spending, remove institutional bottlenecks, and take advantage of the recently approved economic stimulus package. 

What do you think about HCM City’s economic recovery?

The fourth wave of pandemic has had a serious impact on the city’s economy, which for the first time in the last 35 years saw a negative economic growth rate (minus 6.7 per cent).

The largest outbreak, which began last April, has disrupted the city’s economy but the city is on the right track to recover after a cautious reopening in the fourth quarter last year.

It has basically contained the outbreak and shifted from ‘Zero COVID’ to living safely with the virus.

It has issued a plan for socio-economic recovery by 2025 with a focus on improving healthcare, especially preventive healthcare, treatment, drugs, and vaccines.

International tourism is expected to fully resume by March 15 with international flights also to fully resume.

Exports were worth US$9 billion in the first two months, up 12.5 per cent year-on-year which is a very positive sign of economic recovery.

The city contributes more than VNĐ368 trillion to the country’s budget, or 25-27 per cent of the total. 

What should be done to accelerate the city’s economic recovery?

I think the first half of 2022 will see the city’s economic recovery.

The city should continue to help enterprises maintain their business activities while ensuring safety, cutting production costs, renovating technology, and restoring production post-pandemic.

It will need more financial resources to ensure sustainable recovery. It is good that the National Assembly has allowed the city to keep a higher percentage of its budget revenue: 21 per cent instead of the previous 18 per cent.

With this new rate, the city will be able to keep VNĐ41.5 trillion a year, a huge resource for its economic recovery plans.

But to regain its position as the country’s economic locomotive, the city must address a number of issues facing it such as traffic congestion, air pollution, flooding, and others. 

What should be done to maintain the economic locomotive status of HCM City?

HCM City needs to continue with administrative reform and improve its business climate to become more competitive.

It must accelerate public spending. Last year, the city disbursed less than VNĐ30 trillion. It this year aims to increase the figure to VNĐ43 trillion. 

The city must improve its traffic infrastructure, including speeding up the progress of metro routes and investing more in roads connecting ports and the airport. 

It has been struggling with traffic jams, especially congestion at the Tân Sơn Nhất international airport area, both in the air and on the ground.

Its urban master plan must focus on beautifying roads along the Sài Gòn and Đồng Nai rivers to promote river tourism.

It should continue to support businesses (by reducing taxes and fees and providing better access to loans at low interest rates).

It must speed up delayed projects and call off those delayed for too long. 

I think the city will be able to obtain economic growth of 6-6.5 per cent or even higher this year.

As for the recent land auction incident in the Thủ Thiêm new urban area, in which bidders cancelled their bids, the city should review and amend bidding regulations to ensure bidders are fully committed.

The incident has revealed loopholes in the bidding regulations, which creates opportunities for some to raise prices unreasonably to create a fever and profit from it. — VNS

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