Sunday, December 8 2019


Glut of IPs a matter of concern

Update: March, 21/2014 - 09:53

Land allocated to non-performing border-gate economic zones should be revoked and returned to former owners, says Dr Tran Dinh Thien.

Many border economic zones, including the Moc Bai in Tay Ninh Province and Tinh Bien in An Giang Province hardly have any activities. Is that an indication of the saturation of industrial parks and economic zones in our country?

Virtually all provinces and cities have industrial parks. By now, the number has reached 289. In addition, we also have 15 coastal economic zones occupying an area of about 700,000 hectares, plus about 28 border economic zones and many processing zones. All in all, they occupy about one million hectares. However, just 40-50 per cent of these parks are operating at full capacity. Let's make a calculation, on an average, one hectare of the park needs $3 million in investment. So, the country will need US$1.5-1.8 trillion to fill the vacancy in these parks or at least US$ 1 trillion. How can we source such a huge sum of money? So far, there is no answer to this question. It is a grim scenario to see their land lying idle while the farmers do not have land to cultivate. This has seriously affected their livelihood. Should we fill up all these parks at any cost? I don't think so. I have to concede that our investment quality is not as good as expected. After many years, our industry is mainly dominated by sub-contracting orders.

In your opinion, what is the main reason for many big investors not showing interest in our industrial or economic parks?

To attract more foreign investment and cross-border trade, Viet Nam has decided to open quite a few border gate and coastal economic zones. However, we have still failed to attract foreign investors for the very simple reason that they are offered no preferential treatment and are treated just like in any other industrial park. In our policy, we have focused on giving preferential tax and land to investors. These policies seem to be lucrative to small investors, but don't appeal to big investors. But, as a matter of fact, small investors have not focused much on modern technology as they just seek instant money and then leave. The strategy of big investors is somehow different. They want to invest in high tech and stay for a longer time period. But, they don't want to be second to previous investors (the small investors).

In July 2012, the Prime Minister issued an instruction on improving the management and effectiveness of economic and industrial parks. Do you think the PM's instruction is enough to boost the performance of the parks?

The PM's instruction has somehow helped to overcome the problem of "mushrooming" of industrial and economic parks when there is limited capacity to attract investors. However, in my opinion, the document itself is not enough.

To avoid waste, what is the most important is to have strong institutions in place. We have to learn from the experiences of other countries on what infrastructure the investors need and how the parks are managed, among several other factors. We should not think that the red carpet treatment we offer to the investors is already great!

Should we adopt a tax exemption policy for goods stock-piling in warehouses at border gate parks that have only few activities, including the Tinh Bien and Moc Bai parks?

I agree. This can be a spontaneous policy. However, we have to look at the health of the parks carefully. Different agencies should sit together to work out measures to make the parks more attractive to the investors. However, for the case of non-performing border gate parks, I suggest we should return the land to the people as what was done in the case of the Long An Province. — VNS

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