Haiphong is forced to take stock of FDI target

The city’s port offers strategic logistical advantages to investors

The Haiphong Economic Zones Management Authority has adjusted the annual target from $500 million to $200 million this year into the city’s industrial parks and economic zones, and delayed the establishment of two more industrial parks in the port city.

The attraction of foreign direct investment (FDI) capital outside Haiphong’s industrial parks and economic zones has also been gloomy. Haiphong Municipal Planning and Investment Department reported that the city had attracted only five newly registered FDI projects worth $32.6 million in the first half this year, down 28.6 per cent compared to last year’s corresponding period.  Meanwhile, foreign investors registered to expand investment at seven projects, worth $16.3 million, down 65.3 per cent year-on-year.

The result implies a tough road ahead for Haiphong to attract $300 million in registered FDI capital this year as targeted.

Dan Duc Hiep, vice chairman of Haiphong People’s Committee, blamed the figures on the recent global economic recession, adding that the number of foreign investors coming to Haiphong had risen, but many had yet to commit funds. However, many investors complained that poor infrastructure, complicated administrative procedures, a limited skilled workforce and site clearance slowness were the main bottlenecks hampering FDI inflows in Haiphong.

“There are many fields in Haiphong that investors can invest in. However, I think the biggest difficulty is a lack of local authorities’ assistance in site clearance to investors and slow reform of administrative procedures. If they can deal with these hindrances, the investment environment in the city will be improved,” said Nguyen Ngoc Thanh, general director of Haiphong Construction and Development Joint Stock Company.

Nguyen Tai Thuong, chairman Viet Anh Construction and Development Joint Stock Company - which is developing an overseas Vietnamese village project in Haiphong, admitted that Haiphong had yet to become an attractive place for foreign firms.

Most FDI projects in Haiphong are small-scaled and focus on the service and commercial sectors that account 67.13 per cent of the city’s  FDI funds. To improve the investment climate, Haiphong People’s Committee has announced it would shorten administrative procedure reforms and contribute to push up the construction of  the Hanoi-Haiphong expressway, Lach Huyen international port and Dinh Vu-Cat Hai bridge.