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Driving forward

Update: May, 18/2015 - 04:31

Worker produces clothing for export at Yotsuba Dress Viet Nam at Le Mon Industrial Park in Thanh Hoa Province, which creates jobs for 700 labourers. The province is taking advantage of the National Tourism year 2015 to attract more investors for socio-economic development.

by Hoang Son

Both domestic and foreign investors will come across numerous opportunities to invest in Thanh Hoa as the province will be hosting the National Tourism Year 2015.

The National Tourism Year 2015 is an opportunity which the local authority should take advantage of to attract more investments for its socio-economic development.

The reason why Thanh Hoa province has become a promising region for investors is because all roads running from the North to the South have to pass through this province.

Besides, Thanh Hoa is the fifth largest province in Viet Nam with an area of 1,, including 75.44 per cent of mountains and highlands, 14.61 per cent of delta and 9.95 per cent of coastal land.

The province also has the third largest population in the country with nearly 3.5 million people by the end of 2013, including 64 per cent of the population being of employable age.

In fact, in an attempt to improve its socio-economic development, the province has attracted a lot of investments from both domestic and foreign companies.

Deputy Director of the Planning and Investment Department of Thanh Hoa, Hoang Anh Tuan says, "Private enterprises invested total registered capital of 81 trillion dong (US$3.75 billion) and $223 million in 421 projects, including 20 foreign direct investment (FDI) projects from 2011 to 2014."

There are now 57 FDI projects in the province with total registered capital of $10.5 billion, listing the province among top 10 provinces and cities that attract most FDI in Viet Nam.

Among these FDI projects, the provincial authority has allowed 32 projects to increase their total investment by $3 billion.

There are several large-cap projects including an investment of $39 million in a carbonate beverage factory by the Ciech Group, a Polish chemical corporation, or the Long Son cement factory worth 4 trillion dong ($185 million).

According to the Thanh Hoa People's Committee, private investors have contributed a large part of the province's socio-economic development.

In the industry sector, Thanh Hoa recorded a total income of 31 trillion dong ($1.44 billion) in 2010, 75.4 per cent of which was generated by domestic and foreign private companies. This year, the province targets a total income of 62 trillion dong ($2.87 billion) including 82.3 per cent of that contributed by private firms. Vietnamese and foreign companies expect to reach an annual growth rate of 13.2 and 23.3 per cent, respectively.

In the service and commerce sector, the province received a total income of 20.5 trillion dong ($952.5 million) in 2010, with 92.5 per cent of it coming from domestic investors, comprising mostly household businesses. The total income doubled in 2013, in which foreign investors increased their contribution to 0.8 per cent of the total income. This year, foreign investors expect to make up 0.7 per cent of Thanh Hoa's total income, which is 60 trillion dong ($2.78 billion).

Clearly, both domestic and foreign investors have focussed more on the industry sector instead of service and commerce sectors.

Tuan explained that investors prefer industry to the service sector because the industrial parks and economic zones are located in the areas where the infrastructure has already been completed and the natural conditions are perfect for investment projects.

Besides, investors always want to invest in stuff that ensures quick returns for them, though domestic and private investors in the tourism and service sector can achieve an annual growth rate of 24.3 per cent and 186.2 per cent, respectively.

Clearly, the authority and the people need to act so that they can attract more investments to promote the local culture to domestic and overseas markets.

In fact, some domestic investors have already spent their money to develop tourism projects such as the FLC Sam Son Golf Links worth 1.2 trillion dong ($55.5 million) or the FLC Sam Son Eco Tourism worth 11.5 trillion dong ($532.4 million).

Situation needs improving

It cannot be denied that in recent years Thanh Hoa has done well in drawing the attention of private investors. However, the local authorities still have issues to work on.

Tuan reveals that the provincial authority will work with the investors to speed up progress in some major projects such as the Nghi Son oil processing project, cement production projects, hydropower plants and processing industry.

Specifically, from 2016 to 2020, the province plans to build two major industrial projects, which are Nghi Son Economic Zone and Lam Son-Sao Vang Industrial Park.

In Nghi Son Economic Zone, Thanh Hoa is focussing on oil and gas processing, chemicals production and metallurgy, in addition to mechanical engineering and thermal power.

A residential area in Thanh Hoa Province.

The Lam Son-Sao Vang Industrial Park will concentrate on the processing, support and manufacturing industries.

Besides, the province will also focus on improving its handicraft industry by restoring and improving traditional handicraft as well as encouraging locals to develop new products.

The provincial authority will also improve the quality of products and services in the tourism and service sector through raising the quality of the transportation, education and healthcare, along with communication and real estate in an attempt to provide high-quality and highly value-added products.

Investors are also being encouraged to improve the service sector, especially projects that develop telecommunication, digital products and services, e-commerce and logistics services.

Thanh Hoa will also try to promote its tourism and culture, in order to make the province a top tourism destination in Viet Nam.

In this National Tourism Year 2015, the province will organise 11 events to promote its local culture and people. The key in this plan is to make Sam Son a must-visit destination in Viet Nam.

Infrastructure also plays an important part. The local authority has been working on projects such as new roads and upgrading the existing ones in order to connect together every region in the province.

For example, the province has been building a highway that links Tho Xuan Airport with Nghi Son Economic Zone and FLC Sam Son Eco-Tourism Urban Area.

In order to accomplish those plans, the province has to ramp up its competitiveness against other provinces in attracting investments, especially for the potential sectors.

First, the provincial authority has to review and develop new policies, while improving the existing ones, and simultaneously improve the business environment to meet the demands of firms.

There is a need for the local enterprises and entrepreneurs to be strengthened, become more efficient and more visible in order to cope with the tough competition from other domestic and foreign players in the market.

Thanh Hoa will also develop and improve its human resources for the industrialisation and modernisation process in the province.

Administrative procedures should be streamlined to make it easier for investors to enter the market, and the quality of public services and officials should be improved.

The province should also show progress in preserving its environment, and exploiting and utilising its natural resources.

Besides, Thanh Hoa should also improve its Provincial Competitiveness Index (PCI) which was 60.33 in 2014. The province's PCI ranked second in the central coast region and 12th in the country.

The PCI fell from 61.59 points in 2013 to 60.33 points last year. Some of the important indices, such as access to land, informal charges and business support services, dropped in comparison with the previous year.

The Provincial Leadership Pro-activeness did not improve while the Competitive Fairness was low compared to other sub-indices and to other provinces.

Tuan says that in order to improve the situation the provincial authority has issued some directives, initiated some policies and decisions to improve the investment environment for private enterprises entering the local market.

In addition, the province has been trying to reform its administrative procedures. In the past, the Department of Planning and Investment, the Department of Environment and the Department of Finance worked together to evaluate and approve investment projects, which cost the firms a lot of time and money as the projects had to go through various stages before getting approved.

Now, the Department of Planning and Investment has been authorised by the Provincial People's Committee to receive the investment portfolios, review and evaluate them, after which the Department will ask for approval from the Provincial People's Committee. This has actually helped private firms save time and cost and helped Thanh Hoa become more attractive to investors.

Moreover, the provincial authority regularly holds talks with enterprises and investors, in which the investors air their views about their challenges and difficulties. Thus, both the local authority and investors find a way to solve issues of mutual concern. — VNS

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