The Government will issue a decree protecting 3.8 million hectares of rice cultivation land from industrial development.
Speaking at a conference held in Hanoi last Saturday to review the development of industrial parks (IPs) and export processing zones (EPZs) over the past two decades, Deputy Prime Minister Hoang Trung Hai said the decree would provide strict regulations on rice farmland protection.

Around 3.2 million out of the 3.8 million hectares of rice farmland will be put under inter-ministerial administration when the Government decree comes out, he said.

Hai told provincial authorities to carefully consider IP and EPZ development projects. “Don’t tolerate IP and EPZ development projects that will be developed on wet rice fields. In the future, such zones will be mainly developed in poverty-stricken areas.”

In the short run, Hai noted, no new IPs and EPZs will be built if existing ones are not fully occupied.

The warning came as local authorities in recent times have given the nod to many IP and EPZ projects as a desperate solution for attracting investment capital. However, according the Ministry of Planning and Investment, only 65% of the land at the operational IPs and EPZs is occupied at the moment.

Many investors have been unable to develop infrastructure for their industrial zones which are located on former farms, leading to serious land waste in many localities.

Meanwhile, business executives at the conference sought Government incentives to make their IPs and EPZs more attractive than those in neighboring countries such as Thailand and Malaysia.

Before the suggestions, Hai told local authorities continue administrative reform to support investors.

Hai urged the ministry and local authorities to focus on three key factors – infrastructure, human resource training and legal mechanisms – to increase occupancy in the zones to 70% by 2015 and 80% in 2020.

According to the ministry, the country has 283 IPs and EPZs covering a total of around 76,000 hectares. By the end of last year, the zones had attracted 4,113 foreign-invested projects with US$59.6 billion in registered capital. FDI (foreign direct investment) disbursement in the zones was US$27 billion, 45% of the total registered capital over the past 20 years.

FDI flows in the zones have also accounted for 35% to 40% of the annually registered capital in the country. For each hectare of land, the zones created an industrial production value of US$2 million, an export value of US$1.27 million and contributed to the national budget around VND1.38 billion.

SGT