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The dreams of growth for Hanoi

In mid-October and early November 2021, when a lockdown was lifted, Hanoi’s leaders organized two dialogues with enterprises.

Hanoi was the first locality to hold dialogues with enterprises on economic recovery in the new normal, which showed the strong determination of city leaders to improve the business environment, according to Deputy Minister of Planning and Investment Nguyen Thi Bich Ngoc. 

“This shows a big improvement in management thinking, with the shift from managing to supporting enterprises,” Ngoc said.

Hanoi Party Committee Secretary Dinh Tien Dung, who presided over two dialogues, had serious concerns. The measures taken to fight the pandemic in Q3 2021 helped prevent the spread at a time when people were still not vaccinated, but also had a negative impact on economic development.

Hanoi’s GRDP in Q3 2021 fell by 7.02 percent compared with the same period of the previous year. In the first nine months of 2021, the GRDP growth rate dropped to 1.28 percent, an unprecedented low growth rate.

For fast and sustainable economic growth, it is necessary to rely on enterprises. Talking to investors at the dialogues, Dung promised that Hanoi will create the most favorable conditions to attract and welcome capable foreign investors. The municipal authorities committed to ensure investors’ legitimate rights and benefits in accordance with the laws.

According to Dung, Hanoi will continue to improve the quality of planning and planning management; speed up administrative reform; improve the business environment; remove obstacles; and create strong improvements in discipline and rules, improving civil servants’ quality and efficiency.

Growth rate still below expectations

Obtaining sustainable growth rates is one of the tasks assigned to Hanoi, which acts as a locomotive for the entire economic train. 

Under the Politburo’s Resolution No11-NQ/TW dated January 6, 2012, Hanoi was expected to obtain average GDP growth rate of 11.5-12 percent per annum in 2011-2020, and obtain GDP per capita of $7,100-7,500 per annum.

Hanoi’s report reviewing the implementation of the resolution said that in 2011-2020, the gross regional domestic product (GRDP) increased by 6.83 percent per annum, which was 1.15 times higher than the average growth rate of the whole country. 

Its GRDP was $5,325 in 2020, or 2.3 times higher than 2010. The growth rate was 2.92 percent per annum and GRDP per capita was $5,500.

As such, there is still a gap between the expected target and real achievements.

The report reviewing the implementation of Resolution 11 said that Hanoi failed to reach the goal and growth has been slowing down.

The report also pointed out that Hanoi’s GRDP per capita remains low and lower than some other large cities. The figure is just 90 percent of HCM City’s GRDP per capita, 73 percent of Quang Ninh, 84 percent of Hai Phong, and 82 percent of Bac Ninh. 

The figure is also much lower than capital cities of Asia: equal to 8 percent of Singapore, 17 percent of Kuala Lumpur, 26 percent of Bangkok, 27 percent of Jakarta and 86 percent of Vientiane.

2030-2045 vision

In the report, Hanoi’s leaders pointed out that though some growth indicators are still below expectations, the contributions of the capital city to the economy are high.

While accounting for only one percent in area and 8.5 percent of the whole population, Hanoi makes up 16.2 percent of GDP, 19.1 percent of state budget collections and 8.1 percent of the country’s total import and export turnover. It contributes 43 percent of GRDP and 43.8 percent of the budget collections of the Red River Delta. 

Hanoi acts as a large economic and international transaction center and serves as a driving force for regional and national development.

Its economic scale has witnessed positive changes with the service sector accounting for 63 percent, industry and construction 24 percent and agriculture 2.3 percent. The annual state budget collections have increased year after year and exceeded the estimates. The figure was VND2 quadrillion in 2011-2020, while in 2021, despite Covid-19, the collections were still 12.8 percent higher than the estimates (VND265.77 trillion).

The noteworthy feature of the budget is the increase in the percentage of domestic collections and sustainable sources such as production and business (85.7 percent in 2011-2015, 91.4 percent in 2016-2020 and 92.8 percent in 2020) and the gradual decrease in the percentage of budget collections from natural resources and land.

Regarding rural development, in 2021, 16 out of 18 districts, towns and 100 percent of communes met the standards of new rural areas, or two years earlier set in Resolution 11. The material and spiritual life of rural people has improved with the average income of VND55 million per head per annum.

Hanoi strives for a GRDP growth rate of 8-8.5 percent in 2026-2030 and GRDP per capita of $12,000-13,000.

It is expected that by 2030, the manufacturing and processing industry will account for 20 percent of Hanoi’s GRDP, the digital economy 40 percent and cultural industry 8 percent. Hi-tech agricultural production is expected to make up 80 percent of total value of agricultural exports.

By 2045, Hanoi is hoped to be a globally connected, civilized, modern and creative city with high living quality and GRDP per capita of $36,000.

Tu Giang - Lan Anh

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