The Ministry of Planning and Investment has said investment attraction policy for coastal economic zones (EZs) should be made more inviting with international competitiveness for better development of these zones.

The ministry on February 15 published a report on the state of EZs on February 15, with many recommendations for authorities of such zones.

Outstanding investment incentives should be offered to the old EZ model, with an incentive regime for strategic investors. The fields to invest in should be extended, enabling investment in such services as casino and premium entertainment.

Foreign banks and investment funds should be encouraged to provide credit for investment projects in EZs. The State should make specific commitments to respecting and ensuring the rights of investors in the new EZ model.

Besides, apart from the annual allocation from the State budget, the Government should mobilize funds from other sources to support development of some important infrastructure projects in EZs to make sure they progress and start operations on schedule.

At the same time, a policy should be introduced to allow the agencies in charge of EZs to collect budget revenues and use them for reinvestment in infrastructure for EZs.

The ministry says the planning of the new EZ model must meet international standards with a long-term vision, taking into account a mechanism allowing strategic investors to participate in the making and evaluation of development plans.

To ensure specificity and stability, and prevent overlap with the specialized law provisions on land and taxation, there should be legal documents on the contents concerned, the ministry suggests.

Below expectations

The report says that by December 2016, EZs nationwide had attracted 354 foreign investment projects with total registered capital of US$42 billion, some US$20.2 billion of which had been disbursed (48.1%). In addition, EZs across the country had lured 1,079 domestic investment projects worth VND805.2 trillion, with 43.2% of it already disbursed.

A number of large-scale and key projects in Nghi Son EZ, Vung Ang EZ and Dung Quat EZ, including refineries No. 1 and No. 2, the heavy engineering plant Doosan, thermal power plants Nghi Son and Vung Ang, and international transshipment port Van Phong, have enhanced the production capacity of heavy industry, facilitating the development of other industries.

Last year, coastal EZs recorded total revenue of about US$8 billion and more than US$5 billion worth of exports, paying some VND30 trillion in taxes. So far, they have created jobs for around 130,000 workers.

The above figures, however, are still far below the levels set out in the resolution of the fourth Conference of the tenth Party Central Committee on the Vietnam Maritime Strategy until 2020. As per this resolution, Vietnam must become a maritime powerhouse, with sea and coastal economy making up 53-55% of GDP, in which EZs play a central role.

Mechanism hardships

The planning ministry says the plans for establishment of some EZs do not meet the requirements of the development process, failing to take into account the interests of the entire nation.

EZs remain heavily dependent on the central budget for infrastructure construction. As the budget is increasingly tight, many EZs are having difficulty with infrastructure development.

The investment orientation of coastal EZs is to build deep-water seaports and airports and to lure investment in shipbuilding, port services, marine tourism, seafood processing and thermal power. For border-zone EZs, their focus is investment in trade and a number of industries.

By the end of 2016, there are 16 EZs nationwide, including two in the Red River Delta, 11 along the central coast and three in the south, covering a land and water surface area of nearly 815,000 hectares.

SGT