Central EZs face lacklustre future

Tuesday, Jun 19, 2018 08:38

Ships docked at Quy Nhon Port. Every economic zone in the central region relies on a deep sea port. — VNS Photo Phuoc Buu

Experts have predicted a lacklustre future for a chain of economic zones (EZs) built more than a decade ago in the central region.

Instead of working together for common benefits, these EZs are competing against each other.

The current situation is the result of a condensed distribution of EZs in the region as well as similarities in their functional operations.

The region is a narrow stretch of land running along 1,900km of coastline, including 14 localities ranging from Thanh Hoa to Binh Thuan. Each locality has one EZ, except Ninh Thuan and Binh Thuan.

In 2003, Quang Nam became the first province to get an EZ in Chu Lai. In 2005, Quang Ngai and Binh Dinh got the Dung Quat and Nhon Hoi EZs, respectively. In 2006, the region got the licence for four more EZs, including Chan May-Lang Co in Thua Thien-Hue, Nghi Son in Thanh Hoa, Vung Ang in Ha Tinh and Bac Van Phong in Khanh Hoa.

In 2007, Nghe An got the South East EZ and in 2008, Quang Binh and Phu Yen got the Hon La and South Phu Yen EZs, respectively. Da Nang City built a high-tech park in 2010 and had planned for an EZ last year.

Quang Tri is the latest locality in the region to get the licence for an EZ – the South East Quang Tri EZ – in 2015. Each of the 12 localities have similar advantages of deep sea ports, of which the prominent ports are Chan May, Dung Quat, Da Nang Port and Quy Nhon Port.

Five among the 12 EZs, including Chan May-Lang Co, Da Nang Hi-tech Park, Chu Lai, Dung Quat and Nhon Hoi, were grouped to form the Central Key Economic Region by a Government decision in 2008.

According to Duong Dinh Giam, former director of the Viet Nam Industrial Policy and Strategy Institute, the EZs offered similar advantages to investors as well as functioned in similar sectors.

“The rate of occupancy of EZs, even in the Central Key Economic Region, is critically low. Some are still waiting for an investor after years of formation,” Giam said.

According to him, the common sectors that EZs had called for investment into include textiles, wood processing, mechanics and beverages.

Tran Dinh Thien, former director of the Viet Nam Economics Institute, said investors were confused to choose one among the “sibling” EZs in the region. “They have similar potential and share the same shortcoming of less-developed industrial infrastructure as well,” he said.

“Every province wants the best for its locality, which is why they do not mind the competition among the EZs. But they are ignoring the fact that competition will drag the region (economy) down,” he added.

Huynh The Du, head of Fulbright University Viet Nam’s economic training programme, said the economy of the region had almost nothing except brewery factories, Truong Hai Auto and Dung Quat Oil Refinery Plant.

“Da Nang is the prominent locality in the region’s economy, but it comes behind the country’s leading economic cities,” Du said, adding that the central city is the top consumer of the national budget but has low gross domestic product (GDP) contribution. Du said the percentage of labour increase in Da Nang was also low.

At a recent workshop in Thua Thien-Hue, experts said cooperation among EZs in the region was impossible as every locality was focused on its own growth.

Du said the only clear path for economic growth in the region was to gather the EZs as one and invest in good infrastructure for all the localities. “Deep sea ports in the region, for instance, can be gathered under one joint stock company, with each having a different function,” he said.

Experts also encouraged the localities to change their mindset in seeking investors by giving up policies on preferential tax and land lease.

“Each EZ should be good enough to attract large, qualified investors by specialising in one or two sectors where it feels the most confident,” said Thien. He added that Chan May-Lang Co in Thua Thien-Hue, for instance, should focus on medical equipment and manufacture of medicines as well as wellness tourism since medical service and tourism were the key sectors in the local economy.

He emphasised that the focus would make each EZ special for investors and reduce competition among the “sibling” EZs.

Experts also called for a separate governing body for EZs, working independently from the localities’ people’s committees, with an aim of infusing life into a dull economy. — VNS

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