To anticipate FDI capital flow in Nghe An

Anticipating FDI capital flow

Recently, the epidemic situation, combined with instability in Europe, has pushed crude oil prices up sharply, leading to high inflation, seriously affecting the global supply chain and paralyzing many economic and social activities.

In this context, according to many economists, the competition between major economies in findingnew investment marketIn order to diversify risks and reduce dependence on a few countries, individual partners will become stronger. This is an opportunity for developing countries like Vietnam to introduce mechanisms and policies to attract capital flows from these large economies.

Provincial leaders introduced to the Minister of Planning and Investment the industrial park infrastructure in the area. Photo: document

Current reality shows that,FDI capital flowThere has been a shift to Asia, one of the safe investment areas. To attract this capital flow, Vietnam in general and provinces with large industrial land funds such as Nghe An in particular need to have appropriate strategies and policies, ensuring an open environment for investors.

In 2021, despite the complicated developments of the Covid-19 pandemic, the province also granted new investment licenses to 106 projects and adjusted 118 projects, with a total newly granted and increased investment capital of VND 28,072.80 billion.

In the first 3 months of 2022 alone (as of February 22, 2022), the province has also newly issued investment registration certificates for 16 projects with a total registered capital of VND 954.67 billion. 12 projects were adjusted, of which the total investment capital of 5 projects was adjusted with an increase of VND 9,292.24 billion, bringing the total newly granted and increased capital to VND 10,246.91 billion.

Japanese enterprises survey at VSIP Nghe An Industrial Park. Photo: document

To anticipate FDI capital flows, in 2021, the Provincial People's Committee coordinated with the Ministry of Planning and Investment to organizeinvestment promotion conferencebetween Taiwanese investors and Nghe An province on May 14, 2021 in Hanoi. Coordinated with the Trade Promotion Agency - Ministry of Industry and Trade to organize an online trade conference connecting Vietnam - Korea investment on November 10, 2021. Thanks to that, up to now, there have been 102 valid FDI projects with a total registered capital of 2,077.3 million USD.

Investment projects in recent years have been an important source of additional capital to meet the demand for development investment capital; contributing increasingly to the total product in the area and the total budget revenue of the province. Especially in recent years, the province has attracted many large foreign investors to build industrial parks such as VSIP Industrial Park, WHA Industrial Park... which has had an impact on promoting other economic sectors in the province to change their thinking, innovate, and improve their competitiveness to adapt to the new situation.

Provincial Party Secretary Thai Thanh Quy works with leaders of Sembcorp Development Group. Photo: Vien Su

The province currently has 11 industrial parks and 1 high-tech park of 94 hectares. Of which, 5 industrial parks belong to the Southeast Economic Zone with a planned area of ​​4,532 hectares and 6 industrial parks outside the Southeast Economic Zone with a planned area of ​​1,660 hectares. Currently, 6/11 industrial parks have invested in infrastructure construction, the average occupancy rate of established industrial parks is 41.9%. In addition, the province also plans to develop 53 industrial parks, of which 24/53 industrial parks have attracted enterprises to production and business with an average occupancy rate of 81%.

Change your approach

It can be seen that, nowadaysroom for development of Nghe AnThere are still many potentials, especially in terms of land and human resources, but the attraction of FDI capital is still low. The province's investment and business environment still has many limitations, and the effectiveness of administrative reform is not clear.

To improve the effectiveness of investment attraction, according to Mr. Le Tien Tri - Head of the Southeast Economic Zone Management Board, this is the best time to attract FDI capital, however, not only Nghe An but also many provinces are currently focusing on promoting FDI attraction based on comparative advantages. Therefore, in order not to miss the opportunity to attract investment, the province needs to have more focused and drastic solutions to promptly receive that capital flow. It is necessary to reform more strongly; it is necessary to increase support for projects that have been, are and will be operating in Nghe An, because that is the most effective communication channel for the foreign investor community...

Groundbreaking ceremony of Goertek Factory project in WHA Industrial Zone 1 - Nghe An. Photo: Pham Bang

CWe also need to strengthen cooperation with associations, foreign enterprises in Vietnam, and international organizations so that they can support the introduction and connection of potential projects for the locality...

Mr. Le Tien Tri - Head of Southeast Economic Zone Management Board

In Dien Chau district, although located outsideSoutheast Economic ZoneBut this locality has also attracted 3 FDI enterprises to operate, contributing to creating jobs for thousands of workers.

Mr. Tang Van Luyen - Chairman of Dien Chau District People's Committee said that, in parallel with attracting investment from the province, the district itself must also strengthen connections, attract and invite investment. We also need to consider the option that when the Southeast Economic Zone is filled, it will move to the outlying districts, so the most important thing is to make a plan and stick to the approved plan, so that when there are investors, they will be ready to implement immediately.

In order to achieve the goal of improving the investment and business environment and enhancing the efficiency of investment attraction as set out in the Resolution of the 19th Provincial Party Congress, recently on January 24, 2022, the Provincial People's Committee issued Decision 235/QD-UBND on approving the Project to improve the investment and business environment and enhance the efficiency of investment attraction in Nghe An province for the period 2021-2025.

Canned food production at an FDI enterprise in Nam Cam Industrial Park. Photo: Lam Tung

According to this project, Nghe An will focus on attracting industrial production projects to the Southeast Economic Zone, industrial parks and industrial clusters in the province. By 2025, strive to fill up the area of ​​infrastructure construction in VSIP, WHA phase 1, Hoang Mai 1 industrial parks. Implement investment to complete infrastructure and attract investment in Hoang Mai 2, Tho Loc, WHA phase 2 industrial parks and increase the occupancy rate to 100% of operating industrial parks and 60% of industrial parks under construction.

Recently, investment promotion activities have also undergone fundamental changes, with innovative approaches and enhanced professionalism towards focused and key investment promotion. The Provincial People's Committee has also proactively connected, met and mobilized investors to do business in infrastructure of economic zones, industrial parks and industrial clusters, in addition to organizing investment promotion conferences. In addition to new partners, the province continues to focus on attracting FDI capital from traditional areas such as Japan, Korea, Taiwan and Singapore.

Currently, some industrial parks developed by foreign investors in Nghe An still have a lot of vacant space. Photo: Tran Chau

The province also clearly identified infrastructure investors as the connecting point, leading the wave of investment shifting to Nghe An and directly to the Southeast Economic Zone. Focus on attracting strategic investors with financial capacity, experience, multinational corporations, forming valuable production and supply chains, participating in regional and global markets.

Priority will be given to projects with advanced technology, clean technology, modern management, spillover effects, and connections to global production and supply chains. In particular, the province will not consider expanding or extending operations for projects that exploit mineral resources in the province, use outdated technology, and pose a potential risk of environmental pollution./.