Despite many new State policies, enterprises remain hesitant to invest in rural development, according to General Secretary of the Viet Nam Chamber of Commerce and Industry (VCCI) Pham Thi Thu Hang.— Photo hoptri

HA NOI (Biz Hub) — Despite many new State policies, enterprises remain hesitant to invest in rural development, according to General Secretary of the Viet Nam Chamber of Commerce and Industry (VCCI) Pham Thi Thu Hang.

"The number of enterprises operating in rural areas is only about 30 per cent of those nationwide. Most of them are small-scale and earn lower profits than those in urban areas," Hang said.

Secretary General of Association of Hi-tech Application Agricultural Enterprises Ngo Tien Dung added that enterprises were reluctant to invest in the agricultural sector because of its "high probability of risk and slow recovery of capital."

Three years ago, a national programme for rural development aimed to draw 20 per cent of its funding from enterprises and co-operatives, supplemented by the State and provincial budget, credit loans and local communities.

Yet enterprises have so far contributed VND 3.501 trillion (nearly US$167 million), which accounts for only five percent of total capital. Funds mobilised from the State and provincial budget make up 50 per cent.

The government issued Decree No.61/2010/ND-CP on incentive policies for enterprises investing in agriculture and rural areas in 2010. However, the decree is too general to be effective, according to Nguyen Minh Tien, Deputy Director of the Economic Co-operation and Rural Development under Ministry of Agriculture and Rural Development (MARD).

As many as 1,800 of the 9,000 communes across the country will meet the new rural standards by 2015. To realise this target, all power resources need to be mobilised more efficiently, especially from the business community. Therefore, to engage more enterprises in building new rural areas, the Government should have preferential policies to encourage enterprises to invest in hi-tech applications to agriculture, Dung said. The MARD proposed creating more favourable conditions for enterprises to invest in specific products and professions, according to Tien.

So far, as many as 9,000 infrastructure works worth VND30.1 trillion ($1.4 billion) have been improved and built in rural areas, including 38,000 kilometres of road and 15,000 kilometres of canals. — VNS