HCMC can hardly attract foreign investments with public management mindset: official

Vo Van Hoan, vice chairman of HCMC People’s Committee, said Tuesday the application of public investment management mechanisms on private and foreign investments has discouraged business participation in projects that can boost the city’s development.

Hoan was speaking at a meeting to review the one-year-implementation of Resolution 98, which grants HCMC power to adopt various special policies, such as financial aid to push back poverty and increasing salaries for workers and government employees.

However, some policies are progressing slowly, especially those to mobilize resources for the city, such as city development models for transport development, as well as policies to attract strategic investors.

“The solutions are about attracting foreign and private investors, but if the mechanisms and policies are similar to how public investments are managed, business would not be able to join in,” Hoan said.

Hoan cited an example of an independent hospital where 99% of the funding comes from private investments and only 1% from public funds. Despite being predominantly privately funded, all finances are managed as if they were public, complicating routine activities such as infrastructure repairs and staffing changes, which require government approval.

Vo Van Hoan, vice chairman of HCMC People’s Committee, speaks at a city meeting on Aug. 27, 2024. Photo by An Phuong

He emphasized the need for businesses to be involved in policy discussions from the outset. For instance, in building new infrastructure like bridges, businesses should participate early in the ideation and design phases, allowing them to tailor their investments to achievable outcomes.

Truong Minh Huy Vu, head of the HCMC Institute for Development Studies, warned that slow policy reforms could result in a loss of investment opportunities as other countries aggressively court businesses. He cited Germany’s $5 billion incentive to attract Taiwan’s TSMC to establish semiconductor factories as an example of how other nations are competing for investment.

“Policies need to be adjusted quickly to attract investors in this competition,” Vu said.

Phan Van Mai, chairman of the HCMC People’s Committee, said Resolution 98 aims to mobilize resources for the city. Currently, the city is focused on several projects under various funding schemes, totaling around $1 billion in investments. However, progress has been stalled due to slow responses from departments and local authorities.

HCMC plans to host a conference with investors next month to outline the next steps in its investment strategy. The city aims to resolve current obstacles within this quarter to encourage investor participation in certain projects, such as the Hi-tech Park and the Can Gio international hub port in the eponymous district.