Mekong Delta looks for more foreign investment

Of 536 FDI registered projects, the province granted investment licenses to 31 in the industrial sector that support agriculture such as animal feed and food processing. Five of the projects support farms, seeds and cattle cultivation, with total investment of $9.4 million.

by Van Dat

SOC TRANG (Biz Hub) — Foreign investment in agriculture in the Mekong Delta remains low, with a major portion of the funds invested in the industrial, food processing and real estate sectors.

Nguyen Phong Quang, deputy head of Steering Committee for the Southwestern Region, who spoke yesterday at the Mekong Delta Economic Cooperation (MDEC) Forum, said investment in agriculture had increased but "promotion activities for the sector have not brought the expected results."

As of September, a total of 903 FDI projects worth US$12 billion operate in the Delta. Only 52 of the projects are involved in agriculture, forestry and aquaculture, with limited registered capital of US$ 242 million.

Also speaking at the forum, Victoria Kwakwa, director of World Bank Viet Nam, said the Mekong Delta was one of Viet Nam's most dynamic regions, with agriculture and aquaculture contributing up to 40 percent of the Delta's GDP.

"Viet Nam is not different from other countries. The portion of FDI in agriculture is not large. If we look at the US, which has a very developed economy, it's the same. If we look at the Philippines, which is a bit more like Viet Nam, it's the same. Thailand and Malaysia are the same," she added.

She said the Vietnamese government should identify sub-sectors that have high potential for FDI such as rice farms and agro-industry.

According to statistics from the Ministry of Planning and Investment,between 1993 and 2014, Official Development Assistance (ODA) funds allocated to the delta totalled $5.7 billion, or more than 8 percent of the nation's ODA. Roughly $500 million of the delta's ODA funds have been invested in the agriculture sector.

Quang said that domestic investment in the region had focused on the processing industry, manufacturing and real estate.

Investment in agriculture also remains low in Long An Province, which receives more than half of FDI in the Mekong Delta.

Power plant

Authorities at the forum called for investment in 67 agricultural projects in the delta's 13 provinces and cities. However, no MoUs were signed.

Soc Trang Province signed an MoU with three domestic and foreign enterprises on three power projects, one of which is the $2.19 billion Long Phu thermal power plant invested in by India's TATA corporation.

Indronil Sengupta, TATA's chief executive in Viet Nam, said the corporation decided to build the plant because the country was expected to have a power shortage until 2020.

Sengupta said that government policy was open to foreign investors, but that implementation of major projects in the delta should be done more quickly without delays.

Port terminals should also be built soon to facilitate exports, he added.

Current per capita GDP in the delta is $2,037. Last year, the Delta had a GDP growth rate of more than 9 percent, nearly double the national rate. This year, it is expected to be 9.5 percent.

The delta has 51 industrial parks and 200 industrial clusters with an occupancy rate of 50 per cent.

Industrial parks in Long An, Tien Giang, Ben Tre and Can Tho City have the highest occupancy rate in the Delta, according to the Ministry of Planning and Investment. — VNS