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Local authorities warned of easy discipline when receiving FDI

Experts have pointed out that many localities accept small-scale foreign-invested projects which don’t have much significance to the localities, and allocate too much land to these projects.

The Ministry of Industry and Trade (MOIT) has submitted to the government a report on solutions to promote supporting industries as stipulated in Resolution 115/NQ-CP.

The ministry said that implementation of solutions in accordance with the resolution has helped unclog difficulties for enterprises in general and enterprises in the supporting industries in particular.

However, the ministry also pointed out that many tasks have not been implemented, or implemented at a slow pace and the effects, therefore, are unclear. 

Some current policies show shortcomings, but they have not been reviewed and amended. The cooperation among relevant ministries, branches and agencies in implementing assigned tasks is limited, which explains why results are not high.

Ministries and branches have been taking the initiative in performing the tasks assigned to them, but the outcomes remain unclear. They still are not paying appropriate attention to reviewing current regulations and finding solutions to the problems. As a result, some policies cannot be deployed, or are deployed with low results.

For example, there are many problems in tax policies which do not create favorable conditions for enterprises to operate. The policies on supporting industries still lack mechanisms effective enough to link suppliers and manufacturers. 

There is no policy that takes full advantage of the production capacity of export processing enterprises (mostly foreign-invested) so as to increase the domestic added value of products and develop supply chains in the domestic market.

The policies to attract FDI to supporting industries are not attractive enough for large investors. 

MOIT said that localities have gained encouraging results in attracting foreign investors, but awareness about managing FDI in localities is uneven. 

Some localities just pay attention to immediate benefits, and they don’t have long-term strategies. They just strive to attract as many investors as possible, and they don’t pay attention to the quality of investments, thereby affecting the general balance of the national economy.

Many localities don’t focus on formulating policies to attract investment, building and adjusting development planning, but only focus on exploiting the internal strength of the provinces to attract domestic and foreign investments. 

Some localities still accept many small-scale FDI projects, which do not contribute to economic growth and budget revenue. There is also a situation where land allocation is too large for FDI projects that are not based on local planning.

Luong Bang

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