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New method for the new development

Tuesday, 21/11/2017

Vinh Phuc is one of the best provinces attracting FDI, 300 times higher than 20 years ago. But 10 years ago, the province realized that if continuing attracting FDI in quantity, the economy would be unstable.

Mr. Le Duy Thanh - Vice Chairman of Vinh Phuc province's People's Committee exchanged with Banking Times on this issue.

Reviewing 30 years of attracting FDI, Vinh Phuc is in the national top list of attracting FDI. What has the province gained from FDI?

I am very proud of that when going to the US, going shopping, I saw products made in Vinh Phuc. Another product was the car seat, the entire car seat details were produced in Vinh Phuc and exported to North America. Thanks to FDI enterprises, the products "Made in Vietnam" produced in Vinh Phuc were exported to 20 countries around the world.

 

At present, Vinh Phuc has 253 FDI projects from 16 countries with a total registered capital of USD 3.7 billion, averagely USD 14.6 million per project; the average investment rate is USD 3.66 / hectare. 185 projects are in production with the implementation capital of 62% of the total registered.

FDI plays a very important role as a driving force for the socio-economic development of the province. It is also an important factor in maintaining the growth pace and budget revenue, impacting directly, increasing the total social investment capital. In 1997, the budget of Vinh Phuc province was only VND 33,000 billion. After 20 years, in 2016, it was 300 times higher than the figure of VND 100,000 billion.

Moreover, FDI is the motive for the economic restructuring, changes the production capacity and competitiveness of industrial sectors, promotes the application of scientific and technological advances, technology, management skill, modern marketing technology in the production and business of many economic sectors in the province.

According to the report of the Ministry of Finance, Vinh Phuc is one of the five provinces with the budget revenue in the first 9 months lower than the same period of last year due to the reduction from automobiles - motorcyclesproduction and assembly. Is the provincial economy partly passive because of FDI enterprises?

FDI projects have greatly contributed to the provincial economy. We have two big automobile companies,Toyota and Honda. They have contributed to create good effects for the supporting industry in the province and region. But FDI enterprises are firstly influenced by macro policies.

Some companies in the province including Toyota and Honda have been negatively impacted by the policies on car , motorcycle sector ... so that the budget revenue greatly reduced, creating a great impact on economic growth of the province. At the same time, the structure of FDI sector in the province is not really reasonable, when the proportion of investment in industry is very large, accounting for 80% of investment capital, while the service sector only accounts for 16.7%, agriculture accounts for 3.3%.

We saw this so that if continue the FDI attraction in the old way and only FDI enterprises develop, the economy would be unstable. We determine that if the investor contributed VND 1 billion to taxation, they had USD 4 billion to bring to their country.

Therefore, over the last years, we have attempted to improve the investing environment to attract domestic investors. 10 years ago, Vinh Phuc issued Resolution 04 on supporting the development of enterprises in the province. We have made efforts to facilitate domestic enterprises and connect with FDI enterprises, aiming to not depend on FDI. Up to now, Vinh Phuc's businesses have catched up with and there was the determination.

Previously, there were only a few suppliers for FDI enterprises at the low level, but now many companies are at first-level suppliers for Honda, Toyota and there are 20 Japanese people employed by this company. The experience and technology of Vietnamese enterprises have changed. In 1997, 100% of personal income tax payers in the province were foreigners. Now, 40% of personal income tax payers in Vinh Phuc are Vietnamese.

And what will Vinh Phuc do to attract investment as desired?

We hope that there will be new policies and ways for the new development. We will strive to create an environment to develop the linkage among FDI enterprises and provincial ones, support businesses in the province to develop and attract the domestic enterprises to invest in the province, assist them to participate in the global, regional value chain. The province also has the policies to support the development of potential startups.

We also constantly innovate to attract investment, attract more FDI but with a new direction, new requirement. Focusing on attracting FDI from multinational corporations, selecting friendly-environmental projects with high science- technology content, prioritizing projects that are capable of joining in the global value chain. ...

Vinh Phuc also wants to attract more investment in infrastructure development of industrial parks, tourism, service projects, international universities, service sectors such as finance, banking, insurance, health care, education - training.

Thank you for the interview!

Vinh Phuc News


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