A highway link Ha Noi with northwestern region of Viet Nam. The regional economy is seen significant progress with gross domestic product (GDP) growth rates averaging around 9.5 per cent in the recent years.

The Steering Committee of the Northwest Region made the announcement as it was hosting a two-day conference on investment promotion and social security in Son La Province, which began yesterday.

The Committee's Deputy Head Truong Xuan Cu said the regional economy had seen significant progress with gross domestic product (GDP) growth rates averaging around 9.5 per cent over the last five years. GDP per capita had also reached VND24.4 million (US$1,160) per year during the period.

An upgraded traffic system had helped in goods production, in the agriculture, forestry and aquaculture sectors, growing positively.

"But the region was still the poorest nationwide," Cu said, adding that accelerating investments was extremely important for improving the situation, where the economic structure showed slow changes and the socio-economic infrastructure was unsustainable.

Ministry of Planning and Investment (MPI) official Do Nhat Hoang said there were a few sizable foreign direct investment (FDI) projects in the northwest. Currently, there were 106 FDI projects in operation, with a total registered capital of $1.73 billion.

However, Dau tu (Viet Nam Investment Review) reported "scarce capital influx" in the region.

Slovakia's BTG Holding S.R.O began building a $87.6 million brewery in the Hoa Binh Province in 2013, and this plant was expected to produce 190 million litres of beer per year when it became operational in November this year.

China's Xin Gao Sham Co Ltd had invested over $330 million in a rubber processing factory in Lao Cai Province, while Amr Nikel Ltd from Cook Islands had invested $87 million in a mining project in Son La.

Daesang Corp of South Korea was collaborating with investor Kentjana Widjaja to develop a $40.5 million Miwon spice plant, and two Taiwanese Vietnamese investors had registered a $51.5 million tourism project in the Lang Son Province.

"A mountainous terrain is a major barrier for investments in the region. It pushes up costs, reduces business competitiveness and restricts the influx of FDI," said Hoang.

Deputy Minister of Planning and Investment Nguyen Van Trung confirmed that the Government was making significant efforts to support the region. Last year, about VND15.5 trillion ($738.10 million) from the State budget, or 12.5 per cent of the amount extracted for national development, was reserved for the northwest.

In 2013, the Government also adopted a master plan for socio-economic development of the northern mountainous area by 2020. The plan set a GDP growth target of over 8 per cent, and a GDP per capita goal of about $2,000.

Deputy Prime Minister Nguyen Xuan Phuc said the northwest region alone would need up to VND1,450 trillion ($69.05 billion) in investment capital in order to fulfil these quotas.

He said the important pivots for the region were the Viet Nam-China economic corridors and highways connecting Ha Noi to the Lao Cai and Thai Nguyen provinces. National hydro-electric plants, including Son La, Lai Chau and Na Hang, would also drive investments, along with border economic zones and industrial parks.

Phuc urged the region to actively improve the investment environment to secure both domestic and international finances. Well-developed infrastructure and human resources would be vital for any development breakthroughs, and localities must collaborate to achieve these general goals, he emphasised.

Cu of the Steering Committee of the Northwest Region said the region was now focused on calling for investments in mineral exploitation, forest product processing, border gate economic activities, and tourism.

He said many provinces had joined hands with building tours and this had helped them promote their advantages, and the mountainous villagers reduce poverty. Localities had also fostered links in education and vocational training by connecting with universities.

Economists have also urged provinces to boost connections in production-processing-consumption phases and land-labour-technology factors, besides stimulating co-operation between enterprises and farmers.

In the northwest, Lao Cai attracted the most investment capital with $875 million, closely followed by Hoa Binh with $435.4 million, and Son La with $280 million, according to the MPI Foreign Investment Agency.

The Son La conference attracted more than 500 participants, including policymakers, entrepreneurs, trade representatives and diplomats.

The State Bank of Viet Nam Deputy Governor Dao Minh Tu said on Wednesday that commercial banks planned to lend VND4.7 trillion ($218.6 million) to companies in the northwest region this year.

The region plays a strategic role in national defence, security, economy and society. — VNS