Vietnam port city vows to fight crisis
HAIPHONG - Haiphong,Vietnam's third largest city, is feeling the heat from the
Asian economic crisis.
Investment has plunged but the port city's top official,
Tran Huy Nang, has pledged to restructure inefficient
state firms, encourage the private sector and push
initiatives to help existing foreign investors and to attract
new projects.
In the first half of the year only three foreign-invested
projects worth a mere $7.8 million were licensed, and at
the moment no new schemes were being considered. This
compared with 30 projects worth $300 million licensed in
the whole of 1997.
``Psychologically I am worried and the other leaders of the
city are concerned about the drop in foreign investment,''
Nang said in an interview.
``But we are not just stopping at the level of feeling
concerned. Our efforts are to try and get out of this cycle,
to tackle the problem and attract more investment.''
Haiphong lies 105 km (66 miles) east of the capital Hanoi
and boasts the country's second most important port.
Nang, who is chairman of Haiphong People's Committee
or local government, said the city had attracted 76
foreign-invested projects worth a total $1.5 billion since
Vietnam first opened up its economy to outside money in
the late 1980s.
``There are 10 projects which have delayed their
implementation...and some project investors who have
applied to downsize their investments,'' Nang added.
But it was no use trying to duck the fallout from the Asian
economic misery and the priority had to be to ensure
existing investors were looked after, he said. Some 70
percent of Vietnam's foreign investment has come from
Asia.
One current project that has demanded a flexible
approach is also one of his city's largest, a $163 million
industrial zone licensed in 1994 that is being developed by
Japan's Nomura and JAFCO Investment (Asia) Ltd in
partnership with the local Haiphong Industrial Zone
Development Corp.
``According to (Nomura's) investment plan after they
completed the infrastructure they should have attracted
100 to 120 companies. At this moment there are only eight
enterprises operating,'' Nang said.
After requests from the zone and petitioning the
government, Nang said Haiphong had been able to reduce
Nomura's land rent on the 153-hectare (378-acre) site
from $0.675 per square metre annually to just $0.20, and
that he hoped Hanoi would be receptive to a further
lowering of the price to $0.10.
``Flexibility in policy making is very important,'' he said.
He said the city was trying to help other existing investors
by pushing for tax exemptions, increasing land allotments
or areas available for raw material exploitation.
A telephone hotline had been established and Nang said
he was personally willing to discuss concerns with
investors.
Nang, who has been city chairman for around two years,
said development had to be rounded and aside from
foreign investment, state enterprises needed to be
reformed and local private firms given the chance to grow
on an equal footing.
Communist Vietnam's objective is for the state sector --
which enjoys preferential government support and access
to land and credit -- to play a leading role in the economy,
but many state firms are inefficient and loss-making.
``I think competition is a rule of nature and we support
competition but we are confronted with a great challenge,''
Nang said.
He said there were 235 state-owned enterprises in
Haiphong, of which 151 were under local authority
control.
Nang said he hoped the majority of those 151 firms would
be fully or partially privatised and that all sectors -- state,
private and foreign-invested -- would compete on equal
footing.
``We should encourage all industries to develop and allow
for people to enjoy returns on their contributions,'' he said.
By Andy Soloman - Reuters - July 21, 1998.
|