A lot of provinces and cities are planning to open new economic zones to attract more investments. Meanwhile, experts have pointed out that the movement of establishing economic zones should be seen as a threat rather than a joy.
More and more economic zones drawn up
In September 2008, the prime minister approved the master plan on developing coastal economic zones in Vietnam by 2020, under which, Vietnam will have 15 economic zones by that time.
However, the plan is in danger of being broken because more and more provinces and cities want to develop economic zones in their localities. Most recently, the project on Ninh Co economic zone in Nam Dinh was drawn up and the project was agreed on, in principle, to be added into the list of economic zones by 2020.
Besides, the Thai Binh coastal economic zone project has also been added into the above said master plan.
Meanwhile, local authorities still continue “drawing” more economic zones on paper. If travelling along the 1A Highway, one can easily realise that the sign board of Nghi Son Economic Zone and the sign board of Dong Nam Nghe An are located just ten kilometers apart. However, in a recent investment promotion conference, a leader of Nghe An province still spoke out the idea of establishing another economic zone – Nam Thanh Bac Nghe – on the land strip which connects the two above said economic zones.
Where to find capital for economic zones?
Local authorities have their reasons to plan to set up economic zones. Economic zones are considered the most effective tool to attract investment because they offer attractive investment incentives.
Moreover, since economic zones are considered a “national development policy”, every economic zone can receive support from the State in building infrastructural components – a very important factor for the development of localities.
The Decision No 126 guiding the capital support mechanism for infrastructure development of coastal economic zones released in October 2009 stipulates that the state budget will give support in four key works.
First, it will give capital support to the building of the main transportation route in the coastal economic zones, and of the transportation system connecting the economic zones with the outer transportation system.
Second, it will support compensation for site clearance for the projects in economic zones which are considered as having important significance in the development of some certain business fields and have the total investment capital of 20 trillion dong and higher.
Third, it will support compensation for site clearance and in the building of the residential quarters for workers and resettlement areas for those people who have land seized for the site clearance.
Fourth, it will support building solid waste treatment works and concentrated waste treatment system in industrial zones and non-tariff zones in the economic zones.
With so many benefits, it is understandable why all localities want to have economic zones of their own. However, a question has been raised that where the capital can be found to establish so many economic zones.
Professor Tran Phuong spoke frankly in a recent workshop and said that the building of 15 economic zones is an unreasonable undertaking, because it is unendurable for the state budget.
Meanwhile, experts have pointed out that with too many economic zones, the investment incentives offered by different localities have become nearly the same. A leader of the Chu Lai Open Economic Zone also said that Chu Lai has become less attractive, because many other localities also have economic zones and they also offer investment incentives.
“Nearly all provinces in the central region have economic zones which also offer similar investment incentives like Chu Lai. They will be competing fiercely with Chu Lai in attracting investment,” he said.