HCMC: Motivating the domestic market and export development

The process of formation and development of export processing zones and industrial zones (EPZs-IZs) has significantly contributed to the industrialization and modernization, remarkably attracted investment at home and abroad. In Ho Chi Minh City, not only it attracts the domestic and foreign investment, increases the value of industrial production and export volume, but also contributes to increasing the effective use of land, speeds up the urbanization, creates jobs and trains for managers and skilled workers; facilitating the treatment of the environmental impact.
 
Increassing the  investment capital

The EPZs-IZs has been formed and developed  initially with the aim at giving the convenient infrastructure in transportation, waste water treatment system, electricity and water supply; providing the materials fast and directly, also the workforce meeting the requirements with sound salary; being able to deal with the consumer market at home and abroad…

By the end of 2008, there has been 1,143 investment projects operating in the EPZs-IZs with the total registered capital of USD 4,36 billion, in which, 463 projects are from the foreign investment of USD 2,63 billion, 680 projects from local investment of VND 26,080.31 billion (equivalent to USD 1,73 billion),  attracting nearly 250,000 employees.

It’s remarkable that within two years after Vietnam’s joining in WTO, the opportunity to attract investment into the EPZs – IZs has increased. In 2007, total capital investment (including the new and adjusted projects) reaches  USD 537.96 million, increasing 2.4 times compared to 2006 (excluding the Saigon Center Container Terminal  - SPCT).  In 2008,  it is USD 681 million, increasing 27% compared to 2007. The considerable question is most of the new projects are from local investors (56 projects licensed with the capital of USD 394.11 million, making up 81.91% of the new ones).
 
Exporting to over 50 countries and territories. 
 
Most of the projects to be attracted are the clean and environment-friendly ones, related to the key industries for the requirements of the City’s economic structure transformation like the projects of research and development, software and hardware design for the IC semiconductor; the projects of mold components and precision engineering industries; manufacturing and assembling electrical goods - electronics and information technology; carrying out the import and export…

In addition, the investment projects of the light industries such as textiles, leather shoes, food processing industry (accounting for 50% of the projects) with the high export ratio have attracted lots of workers and contributed to upgrading the industry in the technology line, product quality, consumer market at home and abroad. Export turnover so far has achieved  USD 17 billion, exports to 50 countries and territories, and the major markets are  USA, Japan, Europe and Taiwan.

The EPZs-IZs has significantly contributed to the industrial development and economic structure transformation; also to the governmental budget; created more jobs for the unemployed,  quickly  transfered technology. Besides, the EPZs-IZs had great part in production of domestic consumer goods and highly competitive export products; created the best condition to attract lots of investment  for industrial and socioeconomic development.
 
Developing from the competition and integration pressure

This is the result of Vietnam’s joining in WTO. There is a great advantage for Vietnamese products to penetrate and expand their foreign market. In addition, the trade liberalization policy facilitates the world-wide goods imported to the local market. This business pressure makes enterprises more self-motivated in creating new products, improving services and considering the price... Then, they have to constantly renovate the production technology, designs, models  and product quality ...

Currently, EPZs-IZs  have oriented their development in attracting investment of the advanced technology. Especially the mechanical engineering, electrical - electronics and chemicals. According to Mr. Vu Van Hoa - Chairman of HEPZA,  the primary mission in 2009 is to grasp the production and business situation of enterprises and the delayed projects in order to support them; focusing on the trade promotion, expanding the local market and  exporting to the markets that are less influenced by the economic crisis; co-organizing the exhibitons - conferences for product advertisement. 
  
Industrial production value reaches over 30%

Up to now, there are over 150 IZs operating with a total area of over 32,000 ha, attracted over 2,600 foreign investment projects with the total capital of USD 25.3 billion, and 3,070 domestic projects with total capital reached nearly VND 200 thousand billion; created jobs for more than one million workers, nearly 2 million white-collar workers. The EPZs-IZs’ industrial production value  has increased from 8% (in 1996) to over 30% at the moment.

By the end of 2008, one  hectare of the industrial land in EPZs-IZs attracted USD 1.98 million, reaching the USD 0.96 million of the industrial production value, USD 0.4 million/year of the exportation…The average of one hectare provides  72 jobs and VND 30 billion/year.