Attracting Investment into Mekong Delta

(VEN) - On September 6, 2010, the Ministry of Planning and Investment, the Steering Committee for the Southwestern Region and the People's Committee of Can Tho City organized the Mekong Investment and Development Conference in Can Tho. Attendants shared the opinion that poor transport infrastructure and the lack of qualified human resources as well as suitable policies are hindering the attraction of investment into the Cuu Long (Mekong) Delta and economic development in the region.   Statistics from the Ministry of Planning and Investment show that the annual GDP (Gross Domestic Product) growth of the delta was 10-12 percent in 2006-2010. In the first six months of 2010, the GDP growth was 6.8 percent. In 2010, the per-capita income was predicted to reach VND17.8 million and the export revenue to total US$6.2 billion. Every year, the delta creates about 18 percent of the country's GDP, 50 percent of rice production, 70 percent of fruit production, more than 50 percent of seafood production, 90 percent of rice export volume and nearly 60 percent of the country's total export revenue. As soon as the Law on Foreign Investment in Vietnam came into effect in late 1987, the delta became a pioneer in attracting foreign direct investment (FDI) into the country. In 1988, this region attracted four FDI projects with total investment capital of US$7.8 million, which accounted for 10 percent of the number of FDI projects and 2.09 percent of the total amount of FDI capital nationwide. Thus far, the delta has attracted 530 FDI projects with total registered capital of US$9.2 billion. In the first seven months of 2010, investment certificates were granted to 51 new FDI projects with total registered capital of US$1.49 billion. Planning and Investment Minister Vo Hong Phuc said that due to the global economic downturn, the FDI inflow into Vietnam has declined, so the above results gained by the Cuu Long (Mekong) Delta were really a success. FDI in the delta concentrates on the processing and manufacturing industries (419 projects with combined registered capital of US$5.18 billion, accounting for 79.1 percent of the total number of projects and 56.3 percent of the total amount of investment capital). In fact, however, the attraction of investment into the Cuu Long (Mekong) Delta still shows some limitations. The lack of cooperation between different localities in the region makes it difficult for them to bring into play the advantage of each locality. In the past several years, delta provinces/cities organized conferences almost every year to call for investment. Poor infrastructure and the lack of qualified human resources are big hindrances for the delta in attracting investment. Large bridges over the Tien and Hau Rivers have been built and construction of inter-provincial, inter-regional roads, urban infrastructure and airports is underway but existing transport facilities remain inadequate to meet the requirements of development. The percentage of trained workers is still low. In late 2009, that was only 22 percent. It is urgently necessary for the Cuu Long (Mekong) Delta to resolve all these problems. Victoria Kwakwa, the director of the World Bank (WB) in Vietnam, said that delta localities must concentrate on attracting investment into projects that create much added value for their advantageous products. In her opinion, the growth of the domestic market is a factor that attracts foreign investors. The domestic market in the Cuu Long (Mekong) Delta is growing slowly, especially in the segment of industrial products for agricultural uses. The Government and delta localities must pay more attention to developing the transport infrastructure and build logistics centers. They must take into account the impacts of climate change when making regional development plans. "Tight cooperation allows delta localities to bring into play the advantage of each to attract investment and qualified human resources as well as to access new technology, expand the domestic market and accelerate the industrialization and modernization process," emphasized Minister Vo Hong Phuc. Recently, the Government approved the plan for development of the Cuu Long (Mekong) Delta to 2020 with a vision for 2050 and the plan to establish the Mekong Delta Major Economic Zone. These plans serve as an important legal basis to boost the delta's development in the years to come. Effective implementation of these plans will make it possible for delta localities to utilize their potential and resources to promote the development of the entire region./.