VietNamNet Bridge - It is expected that by 2020, coastal economic zones (EZs) will play a decisive role in developing the marine economy of Vietnam, making up 53-55 percent of GDP.

There are 16 coastal EZs

According to the Ministry of Planning and Investment (MPI), by the end of December 2016, coastal EZs had attracted 354 foreign-invested projects with total registered capital of $42 billion and 1,079 Vietnamese-invested projects capitalized at VND805.2 trillion in total. 

The implemented projects have generated 130,000 jobs.

In 2016, coastal EZs brought total revenue of $8 billion, including $5 billion from exports. The revenue was not divided equally among all EZs, but most of it went to eight key coastal EZs with large projects, expected to be implemented in the 2016-2020 period.

Questions

However, these achievements are overshadowed by a number of problems. 

How much Vietnam has invested in the coastal EZs? An MPI report showed that the total investment capital for infrastructure had climbed to VND170 trillion by the end of 2010. The figure would be much higher for 2017. Analysts commented that most of the money for infrastructure development was from the state budget.

Analysts also found that large-scale projects in coastal EZs mentioned in state management agencies’ reports are mostly oil refineries, heavy mechanical engineering (Doosan), thermal power plants and steel mills (Formosa).

The same strategies on attracting investment pursued by all EZs have forced provincial authorities to compete with each other. To scramble for investors, local authorities have to offer big investment incentives.

The licensing of steel, heavy industry and oil refinery projects shows that Vietnam is still pursuing the old way of attracting investment, accepting outdated technologies and polluting projects.

The government was urged to reconsider policies on FDI for coastal EZs after the environmental disaster caused by the Taiwanese firm Formosa occurred 

The $500 million that Formosa accepted to pay to compensate for damages to the central coast was nothing compared with the environmental risks the Vietnamese have had to face. 

“Vietnam doesn’t receive big benefits from coastal EZs, but has to pay a heavy price for environmental disasters,” an economist said.

Dang Dinh Dao, former head of the Economics Research Institute, while affirming the need to invest in EZs, commented that the country needs to change its view about the investment strategy, or it will continue wasting its resources on EZs.

He warned that if there are not reasonable development policies, the huge investments in coastal EZs in the past, present and future won’t reach Vietnamese businesses, but will only benefit foreign-invested enterprises. 

There are 16 coastal EZs with a total area of 815,000 hectares.

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