01:07 (GMT +7) - Wednesday 28/10/2020

Vietnam Today

Da Nang struggling with investment

Released at: 20:15, 11/08/2016

Da Nang struggling with investment

Meeting in central city hears of ongoing obstacles facing investment attraction.

by Khanh Chi

Central Da Nang city licensed five FDI projects with capital of $8.3 million and seven domestic projects with $13 million in the first half of this year.

“The city’s investment activities in industrial development are yet to be successful,” Mr. Ho Ky Minh, Deputy Chairman of the Da Nang City People’s Committee, told a meeting on August 9. It has only attracted 12 projects in industry, mostly of small and medium size.

These projects have focused on sectors such as textiles, machinery and engineering, and food processing. Four have increased their capital by nearly $5.7 million, he added.

The city’s Gross Regional Domestic Product (GRDP) in the first half reached $1.1 billion, a year-on-year increase of 7.9 per cent. Annual growth has been targeted at 9-10 per cent.

According to a report from the Economics and Budget Board of the Da Nang City People’s Council, the city still has many shortcomings and limitations in economic development. After 20 years as a municipality its economy remains marked by micro and small enterprises. Few local enterprises record export turnover in excess of $100 million.

Production capacity and product competitiveness are low. The city has introduced a range of support policies, plans and programs but they have been largely ineffective. Only a small number of businesses have accessed these policies, plans and programs.

The report noted that the city’s Provincial Competitiveness Index (PCI), Public Administration Reform (PAR) Index, and Information and Communications Technology (ICT) Index have continually lead the country but efforts at attracting investment capital, especially foreign investment, are still unsatisfactory. The situation is not improving, as the first half saw declines in both the number of projects and registered capital.

There were 22 newly-licensed projects in the first half with total registered capital of just $10 million, while one project reduced its capital by $14.3 million. Total project numbers now stand at 409 with registered capital of $3.67 billion, of which less than 50 per cent has been disbursed. The figures reveal that most are small-scale projects.

Besides factors such as land, incentive policies, and human resources, there are many other causes behind the low investment attraction, particularly investment promotions being unfocused, coordination among relevant agencies being loose, information provided to investors being inconsistent, and administrative procedures still being time-consuming, the report said.

Regarding land management, public opinion has been raised about foreigners buying real estates via Vietnamese people. The issue is problematic for long-term management by authorities and the Economics and Budget Board proposed the city direct related authorities to control the situation.

The implementation of the pilot sale of social housing and land use rights auctions has been slow. The task of reviewing and retrieving coastal projects has been limited, with only one project withdrawn in 2015. Most delayed projects have now committed to an implementation schedule.

User comment (0)

Send comment