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Last updated: 08/09/2014, 4:06 CH - View: 4491
Enhance the performance of industrial parks and economic zones in VietNam

The fact that a number of large-scale projects located in Industrial Parks (IPs) and Economic Zones (EZs), IP and EZ companies considerably contribute to the export growth rate, state budget revenue, job creation is a good evidence for the contribution of IPs and EZs to the national socio-economic development.

In an exclusive interview with the Vietnam Industrial Park Review, Mr. Tran Duy Dong, Director General of the Department of Economic Zone Management under the Ministry of Planning and Investment, emphasized the demand to improve the IP and EZ planning quality, consolidate the organization of IP and EZ management authorities at both national and provincial levels, and continuously compile and improve the legal framework to promote the efficiency, effectiveness and the driving role of IPs and EZs in Vietnam.   

Reporter: Could you briefly note the key development of IPs and EZs nationwide?

Mr. Tran Duy Dong: To date, a number of 455 IPs is in the Government’s Master Plan to the year 2020, of which 293 IPs has been established, occupying a total area of 82,701 ha. Out of 293 IPs, 207 have been in operation with the total area of 61.601 ha; the remaining have been in the site clearance or construction process, occupying the total area of 21.100 ha. The leased area of all IPs amounts to 25.300 ha, making the percentage of leased area of established IPs attains 47%. Particularly for operating IPs, the leased percentage is above 64%.

Vietnam now has 15 coastal EZs with the total coastal and surface area of over 697.800 ha. Those numbers remain stable lately. The area leased by manufacturing projects is 21.000 ha, accounting for 41% of the total area planned for industrial, tourism and service activities inside the EZs.  

Mr. Tran Duy Dong

As for investment accumulation, up to June 2014, the IPs nationwide attracted 5,290 foreign invested projects with the total registered capital of 77.1 billion USD, of which implemented capital was 36.7 billion USD, taking an account of 48%. The IPs also induced 5.246 domestic projects with the registered capital of more than 490,078 billion VND, of which the implemented capital was 235,144 billion VND, accounting for 49%.  The EZs hosted 158 foreign invested projects with the total registered capital of 36.2 billion USD of which the implemented capital accounted for 20%; 730 domestic projects worth 450,407 billion VND, of which the implemented capital accounted for 37%.

As for the early 6 months of 2014, the total sale revenue from IPs and EZs’ enterprises amounted to 47,408 billion USD and 76,634 billion VND, increasing by 34% year-on-year and reaching 62% of the year plan. The total export volume from IP and EZ sector attained 27,164 billion USD, making up 42% of the national export volume and 20% increase year-on-year. The total import volume of IP and EZ sector reached 29,617 billion USD, making up 47% of the national import volume and rising by 47% year-on-year. IPs and EZs contributed over 37,599 billion VND, growing by 27% year-on-year, attaining 60% of the annual plan.

To date, the IP and EZ sector accounts for over 50% of FDI in Vietnam and 80% of FDI poured into manufacturing activities, 40% of the national export volume, contributing 60,000 billion VND to the annual state budget revenue and creating 2.5 million job opportunities.

Reporter: It has been well recognized that IPs and EZs made important contribution to the socio-economic development. However, IP planning and related field remain much controversy recently. Therefore, what kind of measures the Government has taken to address the issues and upgrade the planning quality of IPs?   

Mr. Tran Duy Dong: Generally speaking, most of IPs have been established and expanded  in accordance with the National Master Plan which was approved by the Prime Minister. However, the fact reveals that in some provinces, the establishment and expansion of IPs has not been in conformity with their own conditions and potentials. Some provincial authorities have not seriously design a concrete schedule to execute the Master Plan with specific targets in each phase of development taking into account its practical potentials.  

In the past, the IP development planning was not in line with the Socio-economic Master Plan as well as other developing plans in land, municipality, and employment. That fact leads to the mass development of IPs, resulting in the extravagance of resources, especially the land.

To address the problems, the Prime Minister issued the Directive No.07/CT-TTg dated 02 March 2012 on redressing the management and enhancing the efficiency of EZs, IPs and industrial clusters, in which, during the process of monitoring and evaluating the efficiency of IP and EZ development, the pause of supplementary planning and newly-established IPs and EZs is nationally forced.

 Decree No. 164/2013/ND-CP dated 12 November 2013 of the Government on amending and supplementing a number of articles of the Government’s Decree No. 29/2008/ND-CP dated 14 March 2008 on IPs, EPZs and EZs has obviously regulated the functions and tasks of related Ministries, branches and Management Board of IPs/EZs in managing the investment activities, IP establishment to ensure the Investment Certificate licensing as well as IP establishment process be in conformity with the conditions, process and procedure regulated by laws. Besides, the checking-up and monitoring process of IP and EZ planning has been executed more regularly, closely and continued to be speeded up in the coming time.

In performing the tasks given by the Prime Minister, the Ministry of Planning and Investment in coordination with the provincial authorities and Management Boards of IPs/EZs has examined the implementation of the IP Master Plan towards 2020 of each province. The results show that provinces have seriously implement the direction of the Prime Minister in reducing the inefficient land of IPs and remove the unimplemented IPs out of the Master Plan. In detail, 35 provinces/cities proposed to remain or reduce the area of their planned IPs. To date, 8 provincial reports to review and amend the IP Master Plan have been approved by the Prime Minister.    

Based on the examining results, the Ministry of Planning and Investment will complete the draft Report on “Review and Revise the National Master Plan of IP Development toward 2020” to submit for the Prime Minister’s approval. It is oriented that the planned area of IPs will not be increased by 2020; otherwise, those IPs which were planned in the area with unfavorable development conditions, were unable to operate, or inefficiently operated are supposed to be removed from the Master Plan. Besides, the planning should be enhanced to further promote the efficient performance of IPs and EZs as well as their contribution to the provincial and national socio-economic development.

Reporter: In order to lift up the performance of IPs and EZs, besides the efforts from enterprise sector, it is called for the role of IP/EZ Management Boards with the state management function. Related to the function of the Management Board, how far has the consolidation of IP/EZ management bodies according to the Decree No. 164/2013/ND-CP been executed?

Mr. Tran Duy Dong: The IP/EZ Management Board is the chair provincial body to perform the state management of investment into IPs and EZs. At present, the IP/EZ Management Board is authorized to perform two main functions: (i) the functions/tasks which are decentralized and/or authorized by the Provincial People Committee and relevant Ministries stipulated in the Decree No. 29/2008/ND-CP and Decree No. 164/2013/ND-CP in the field of investment, construction, trade, environment, labor and planning management; and (ii) the tasks entrusted by the Provincial People Committee as one of its advisory bodies in managing the IP infrastructure projects and industrial clusters. 

However, in fact, the authorization of Ministries, branches and the Provincial People Committee have been inconsistent between provinces, leading to the difference in function and organization between Management Boards of different provinces. Therefore, the consolidation of IP/EZ Management Board is an necessary task.

Also, as stipulated in the Directive No. 07/CT-TTg dated 02 March 2012, the Prime Minister authorized the Ministry of Planning and Investment in collaboration with the Ministry of Home Affairs to compile “the Project to consolidate the organization and functions of IP/EPZ managing agencies from the government level to the provincial level”. This task is also assigned in the Decree No. 164/2013/ND-CP dated 12 November 2013 of the Government.

 Recently, based on the provincial reports on the organization and functions of IP/EPZ Management Boards, the Ministry of Planning and Investment in collaboration with the Ministry of Home Affairs has been compiling the Project. Main directions of the consolidation process are proposed as follows:

First, merge the separated Management Boards of IPs, coastal and bordergate EZs of a province into one Management Board to streamline the system and reduce the number of responsibility agencies. As for province with specific conditions, a particular case could be considered.

Second, unify the organization, functions and tasks of the Management Boards of different provinces. The Management Boards will be categorized based on their performance and human resources; based on the categories, regulate particular functions, tasks and organization for each group. The categories will be defined upon the revision of ranking criteria of management boards.

Based on the directive opinions of the Steering Committee for IP and EZ Development on the Project, the first Draft of the Project has been completed. After getting the opinions from relevant bodies, the Ministry of Planning and Investment will revise and submit the Project to the Prime Minister for approval within the third quarter of 2014.     

The compilation of this Project will also be in line with the composition of joint-circular of the Ministry of Planning and Investment and the Ministry of Home Affair on functions, tasks, responsibility and organization of the Management Board. To compile the joint-circular, the Compiling Board has been established. The joint-circular is proposed to regulate the functions and missions of management boards in various fields based on the guidance and authorization of Ministries, branches and Provincial People Committee.

As regulated in the Decree No. 164/2013/ND-CP, within 6 months since the enforcement date of the Decree (01 January 2014), the relevant Ministries and branches are responsible for guiding or authorizing the Provincial People Committee and the Management Board to perform the tasks regulated in this Decree. Also in the Notice No. 279/TB-VPCP of the Government Office announcing the conclusion of the 4th Steering Committee’s Meeting, Deputy Prime Minister Hoang Trung Hai entrusted the relevant Ministries and branches to push up the guidance and authorization to the Management Boards to perform the tasks regulated in Decree 29/2008/ND-CP and Decree No. 164/2013/ND-CP.    

Reporter: Beside the model of IP, EPZ, EZ, some provinces have recently researched and proposed new models of economic zones such as special economic zone, special administrative and economic zone with particular preferential policies and mechanism to attract investment. Could you note some guidelines and directions to develop these new models in Vietnam?

Mr. Tran Duy Dong: The models of free economic zone, special administrative zone, special economic zone and others have been long executed and proved a success in a number of countries. However, these models are new for Vietnam. The actual development of existing models in Vietnam pushes forward the seek for a new driving economic model with typical characteristics to deploy the favorable geo-political location, natural and human resources, and other potentials for development. Therefore, it is necessary to formulate a framework of concept and policy orientation for the special administrative-economic model.  

Aiming to be the driving force for provincial and national development, the proposal to establish special economic zones receives a consensus within the Party and the Government. Recently, the Political Bureau has agreed to compile the project for special economic zone establishment in Van Don (Quang Ninh province), Van Phong (Khanh Hoa province) and Phu Quoc (Kien Giang province).

To ensure a well-founded legal framework and practical experience to implement the new model, the Prime Minister assigned relevant authorities to seriously justify the necessary elements, favorable conditions and potentials of Vietnam comparing to other countries to develop the model. Based on the researching results, relevant authorities are assigned to report to the Prime Minister and the Political Bureau for final decisions. 

Reporter: Thank you very much for the interview and wish you all the best! 

by Ha Phuong

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