Industrial and export processing zones urged to upgrade to attract FDI

A part of the Phố Nối A IP in Hưng Yên Province. — Photo viettimes.vn

HÀ NỘI — Việt Nam’s industrial parks and economic and export processing zones need to overcome weaknesses to attract further high-quality foreign direct investment, experts have said. 

Việt Nam has established 335 industrial parks (IPs) on a total area of 97,840ha, of which 260 are already operational with an occupancy rate of over 76 per cent, while 75 are under construction, according to the Department of Economic Zones Management.

The country is also home to 17 economic zones (EZs), covering nearly 850,000ha.

These zones have thus far attracted over 9,780 foreign-invested projects with a total registered capital of US$194.69 billion, and $109.79 billion of the sum has been disbursed. At the same time, they also lured 1,387 domestically-funded projects worth over VNĐ1.46 trillion, and VNĐ533 billion have been implemented. 

According to Chairman of the Việt Nam International Arbitration Center (VIAC) Vũ Tiến Lộc, as Việt Nam moves towards industrialisation and modernisation, IPs and EPs have played an important role in attracting investment in manufacturing and contributing to the State budget.

However, their development has many weaknesses, such as a lack of large zones and a shortage of adequate infrastructure to develop key industries and modern services, making it difficult to attract major investors from Europe and North America.

Many localities thought that their IPs, EPZs and EZs only needed to provide businesses with premises and factories rather than offer them an ecosystem and international standard business support area, Lộc said. 

Đặng Hùng Võ, former deputy minister of Natural Resources and Environment, said the majority of investment into Việt Nam’s IPs and EZs mainly came from Singapore, Japan, South Korea and Taiwan instead of from Europe and North America as there were still too few large-scaled IPs which would comprise mixed-use industrial-urban-service areas, in the country. 

Võ said many large IPs in the world had mixed-use industrial-urban-service areas. For example, the Shanghai Xinzhuang Industrial Park (SHXIP), in which half of the investors came from Europe and North America. 

Bùi Lê Anh Hiếu from Long Hậu JSC, which owns the Long Hậu Industrial Park in Long An Province, said many IPs had been planned with the empty ground or rudimentary factories and lacked the necessary connections and services for production. Hiếu also outlined investment location, logistics infrastructure, time, and rental costs as three significant issues investors care about.

He suggested that more institutional reforms were needed, especially on upgrading services to create better conditions for investors to attract high-quality FDI in IPs and EPZs. 

Furthermore, experts said that difficulties in access to investment information and matters surrounding human resources also gave investors a headache. 

Kenji Usuda, General Director of the Japanese Kyouwa Co, told a conference in HCM City last week that Việt Nam had to improve the quality of its human resources to attract more foreign investors to its IPs and EZs. 

Earlier this year, several IPs in many localities across the country received approval from Prime Minister Phạm Minh Chính to establish and expand, vneconomy reported.

The PM approved a plan to develop the expanded Hòa Phú IP infrastructure in Bắc Giang Province. The 85ha project requires an investment of over VNĐ1 trillion, including VNĐ166 billion from Hòa Phú Invest Co. 

In Hải Phòng City, Tiên Thanh IZ JSC received an approval to build 411ha Tiên Thanh IP, which is expected to cost more than VNĐ4.59 trillion. At the same time, Plastic Chemicals Group JSC was allowed to develop the expanded Đồng Văn I IP in Hà Nam Province with a total investment capital of VNĐ540 billion. 

The PM also greenlit the Hoà Phát Hưng Yên Industrial Park Infrastructure Development Company’s plan to develop the expanded Yên Mỹ II IP. The project covers 216ha in Hưng Yên Province and requires an investment of over VNĐ2.68 trillion. 

Meanwhile, the development of Phú Thuận IP was also approved by the PM. To be built at a cost above VNĐ3.58 trillion, the IP spans 232ha in Bến Tre Province’s Bình Đại District. — VNS