Electronic components, after being manufactured at a factory in an IZ, need to be transported to other places. However, the transport network is poor because of traffic jams, and transport service providers have no other choice than to carry the products at 5 am to avoid traffic congestion. 

Somhatai Panichewa, CEO of Amata Vietnam, spoke recently about the current situation of transport infrastructure in the south, where there are many IZs and large manufacturing factories.

“What is the average speed for you to move from the central area of HCM City to Tan Son Nhat airport? I think it is just about 30 kilometers per hour as traffic jams are heavy,” she said.

Many foreign investors complain about poor infrastructure conditions in Vietnam.

Phan Van Chinh, deputy CEO of IDICO, said foreign investors have told him that they don’t need tax incentives but need favorable transport. High logistics costs seriously affect the operation of their companies. If costs decrease, profits will increase. Therefore, to some extent, good transport connection is more important than tax incentives.

Most recently, Minister of Transport Nguyen Van The commented about the transport infrastructure in the southeast and the southern key economic zone (eight cities or provinces, including HCM City, Dong Nai, Ba Ria – Vung Tau, Binh Duong, Binh Phuoc, Tay Ninh, Long An and Tien Giang provinces). He said roads and railways are inadequate, airways are overloaded, and waterways still cannot satisfy requirements for container transport.

If the problems cannot be settled, the economic locomotive of the country will slow down and become a burden on the economy.

The southeastern region and southern key economic zone play a strategic role in the economic development of the country as they make 35 percent of GRDP and account for more than 40 percent of state budget collections.

Meanwhile, when reviewing the implementation of Resolution 53-NQ-TW released in 2005 about regional socio-economic development, Tran Hoang Ngan, head of the Institute for Development Studies, pointed out that many criteria have not been met while economic growth has  decreased.

In 2011-2015, the region witnessed a 6.87 percent growth rate, but the figure fell to 5.5 percent in 2016-2020, while Resolution 53 set the growth rate target of 9-10 percent. 

In 2006-2010, the region contributed 54 percent to state budget collections, but the figure has dropped to 46 percent, lower than the target of 55-60 percent.

Tran Dinh Thien, former head of the Vietnam Economics Institute, said the southern key economic zone has six times more the number of enterprises and five times more port capacity than the northern economic zone, but its length of highways is much lower. 

There is still no belt road for goods transport. Over the last 10 years, the productivity of the region has increased by 5 percent, while the northern economic zone rose 8.54 percent.

The role of the southeastern region and the southern key economic zone has become weaker. An economic zone leading in international competitiveness has seen indexes declining for a long time.

“You cannot lay the blame on investment decreases or mechanisms. This is a story at the national level,” Thien said.

Solutions

Involved parties have been discussing solutions for the economic zone to remove bottlenecks and regain growth.

Binh Duong Party Committee Secretary Nguyen Van Loi said there is still no development strategy for the entire region, so each province "runs for itself" and makes decisions for the sake of their own benefit rather than the common benefit of the whole region. 

There is no common voice in development planning and no support among each other.

Since there is still no "command mechanism", the provinces just gather in a ‘club’ without serious purpose, which doesn’t bring economic efficiency. Loi believes there should be a Deputy Prime Minister who acts as the commander of the economic zone in order to have more resources for development.

HCM City Mayor Phan Van Mai said it is necessary to have a mechanism that coordinates the development of the region, and to set up an apparatus with a regional steering committee, regional council and consultancy team. 

Particularly, it is necessary to develop regional transport, roads (belt roads, highways), waterways (on Sai Gon, Dong Nai and Vam Co rivers, connect Mekong Delta with Cambodia), and railways.

Asked why HCM City and the southeast still want to have special mechanisms if they have been developing well, Mai said this is not about "asking for more money for the rich" but about supplementing resources to help the southern key economic zone do well as the locomotive of the national economy. 

Ngan said that cooperation among provinces and cities plays a very important role in development. If they want to go far, they need to go together.

He suggested that the rate of budget collections retained in HCM City should be higher than 25-26 percent as currently applied.

Tran Chung