Dong Thap province seeks more FDI capital
Located in the Mekong River delta and 165 km to the southwest of Ho Chi Minh City, Dong Thap province covers an area of 3,376.4 square kilometers with 12 administrative units, namely Cao Lanh, Thap Muoi, Thanh Binh, Tam Nong, Tan Hong, Hong Ngu, Chau Thanh, Lai Vung and Lap Vo districts, Sa Dec and Hong Ngu towns and Cao Lanh city.

Located in the Mekong River delta and 165 km to the southwest of Ho Chi Minh City, Dong Thap province covers an area of 3,376.4 square kilometers with 12 administrative units, namely Cao Lanh, Thap Muoi, Thanh Binh, Tam Nong, Tan Hong, Hong Ngu, Chau Thanh, Lai Vung and Lap Vo districts, Sa Dec and Hong Ngu towns and Cao Lanh city.

Over the recent years, the province has recorded outstanding economic achievements, ranking second in the Mekong River delta with an annual growth rate of 14.12 percent during 2006-10. Dong Thap also topped the country’s 2012 provincial competitiveness index (PCI) on business environment, with the proactivity of provincial leadership being the leading sub-index among 63 provinces and cities.

To help Dong Thap remain in the group of the best performers in the country’s PCI in the years to come, Chairman of the provincial People’s Committee Le Minh Hoan has asked local administrations and sectors to identify reasons for low scores in other eight sub-indices in order to work out appropriate solutions, further facilitate businesses’ activities and make better preparations for foreign investment inflow.

According to Prime Minister Decision No. 470/QD-TTg of March 30, 2011, approving the master plan on Dong Thap’s socio-economic development through 2020, the province is required to boost socio-economic development in a sustainable manner with special focus on the growth quality and economic competitiveness. In the meantime, it should complete its infrastructure system, particularly transport facilities, gradually make firm strides in agricultural development and building of a new countryside; diversify industrial products, particularly those for agricultural production; invest in the trade-service infrastructure and facilitate fast tourism development after 2015. It should also improve human resource quality, create more jobs for local laborers and step by step better their living conditions; and accelerate its international economic integration.

The master plan sets forth orientations for the development of agriculture, forestry, fisheries and rural areas, industry and construction, trade and services, infrastructure development, socio-economic fields, defense and security.

To obtain these goals, the master plan puts forward solutions, including selection of fields that can create breakthrough developments, mobilization of investment sources, human resource development, scientific and technological solutions, utilization of natural resources and environmental protection, improvement of the state administration capacity, and trade promotion and development cooperation.

Socio-economic achievements and targets

Dong Thap province’s export turnover is estimated at USD 412 million in the first half of 2013. Its six-month industrial production value is expected to exceed VND 7 trillion (USD 336 million) and retail sales of goods and services turnover will reach VND 25.1 trillion (USD 1.2 billion).

To rank among leading provinces in socio-economic development in the Mekong River delta, Dong Thap is striving to reach an annual economic growth rate of 13 percent during 2013-15 and 12.4 percent during 2016-20, with per-capita gross domestic product (GDP) of more than USD 1,500 by 2015 and over USD 2,900 by 2020. Its economic structure is shifting towards higher proportions of industry, construction and services and lower shares of agriculture. The proportions of industry-agriculture, construction and services will be 37, 30 and 33 percent by 2015 and 28.5, 36.5 and 35 percent by 2020, respectively.

The province plans to increase its annual export turnover by 11.7 percent to USD 650 million by 2015 and USD 1.35 billion in the subsequent five years, of which cross-border trade will make up around 10 percent. The mobilization of investment capital from the entire society will represent between 29 and 31 percent of its GDP.

In addition, Dong Thap strives to record an annual growth rate of 6 percent in agro-forestry and fisheries until 2020. To reach the target, the province has to stabilize its rice cultivation area at 195,000 hectares, zone off concentrated rice production areas, expand the acreage of industrial and subsidiary crops on alluvia and along Tien and Hau river banks. It plans to develop garden economy on a total area of 28,600 hectares, focusing on its specialty products and renovate production methods in traditional craft villages in combination with hi-tech cultivation techniques for pot flower development in Sa Dec so as to set up hi-tech agricultural zones specializing in pot flowers in Sa Dec town and plant varieties and animal breeds in Cao Lanh city.

The province will also exert its efforts to raise its annual growth of industrial production to 19.5 percent during 2013-15 and 15.2 percent during 2016-20; and trade and services to 15 percent during 2013-15 and 14.1 percent during 2016-20. The province is expected to set up seven industrial parks and 32 industrial clusters on a total area of over 4,626 hectares by 2020.

Investment promotion

With the highest PCI in the country in 2012, the province is focusing on building its infrastructure facilities to attract foreign and domestic investors. It boasts many advantages for development but its investment figures remain modest compared to its potential.

According to the provincial Planning and Investment Department, by late April, 2013, Dong Thap had attracted a total of 18 foreign direct investment (FDI) projects with a combined registered capital of VND 1.14 trillion (USD 50 million). To date, a US-invested aquafeed project of Cargill Vietnam Co. Ltd., with a total capital of VND 284 billion (USD 14 million) in Sa Dec industrial zone is the largest one in the province. However, only one FDI project was licensed in the province so far this year.

To attract more FDI capital in various fields, Dong Thap is offering preferential policies to investors in accordance with the Government’s regulations. Ten out of 12 administrative units (except for Cao Lanh city and Sa Dec town) will apply preferential treatment to investors. Investment incentives are being granted to investors in districts with extreme socio-economic difficulties. They will be exempted from land rents for between seven and 15 years and corporate income tax for between two and four years and 50 percent reduction in their tax in the next four to nine years. They will also be exempted from machinery and equipment import duty as stipulated in Government Decree No. 87/2010/ND-CP of August 13, 2010, detailing a number of articles of the Law on Import Duty and Export Duty.

Businesses investing in Dong Thap’s agriculture and rural areas will benefit from other land and tax incentives provided in Government Decree No. 61/2010/ND-CP of June 4, 2010, on incentive policies for investors in agriculture and rural areas. Under the decree, land use levy and land rent will be exempted or reduced for investors apart from financial support for vocational training for workers and trade promotion as well as assistance in borrowing soft loans.

The province has created favorable conditions for investors to conduct surveys in the province and organized investment promotion conferences to introduce the provincial socio-economic development and the advantages of projects calling for investment. The provincial authorities have actively cooperated in granting investment licences and assisting investors in project preparation and implementation. They always encourage investors to speak out their opinions on the province’s investment environment and regulations and administrative reform. The provincial administration has committed to assisting investors in completion of administrative procedures, payment of compensations for ground clearance and labor training.

By 2020, the province expects to attract a total investment capital of around VND 231 trillion (USD 1.15 billion) for agriculture, industry, trade-service and tourism, transport and environmental protection.

To make it happen, the province has devised specific solutions to mobilize domestic and foreign financial resources, including listing programs and projects calling for investment until 2020 and issuing attractive and transparent investment incentive policies. In addition, it needs to mobilize investment from all economic sectors in education-training, health care, culture, sports, science-technology and environmental protection among other fields. Investment forms such as build-operate-transfer (BOT), build-transfer (BT), build-transfer-operate (BTO), and private-public partnership (PPP) should be further expanded to facilitate the development of the local capital market, joint ventures and investment linkages and contribution of capital in assets.

With its potential and preferential treatment policies, Dong Thap hopes to attract more and more investors, domestic and foreign, to the province.-

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