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3 SEZs to cost Vietnam whopping $70 billion

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Experts have voiced concern about the huge amount of capital, VND1,570 trillion, needed to develop three special economic zones (SEZs), saying this will put a heavy burden on the economy.

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Vietnam needs huge amount of capital to develop three SEZs

 

The Ministry of Finance (MOF) estimates Vietnam will need capital, equal to US$70 billion, to develop the three SEZs – Van Don, Bac Van Phong and Phu Quoc. 

Of this, VND270 trillion would be allocated to Van Don SEZ in 2018-2030, while VND400 trillion would be reserved for Bac Van Phong in 2019-2025 and the remaining VND900 trillion would be spent in 2016-2030, to develop Phu Quoc Island into a busy SEZ in which domestic capital would account for 59 percent and foreign capital 41 percent.

Huynh The Du from the Fulbright Economics Teaching Program (FETP) said the investment capital of tens of billions of dollars would burden the national economy. It is necessary to examine whether the benefits brought by the SEZs are higher than the costs.

Du, speaking to Tuoi Tre reporters, mentioned the necessity of making hefty investments in Hanoi and HCMC to improve the competitiveness of the national economy. In the context of global integration, Vietnam needs to create internationally competitive urban areas, which attract talented people.

If Vietnam wants to attract international corporations, Du believes that the eastern part of HCMC, including Thu Thiem area, plus districts 2 and 9, would create a more effective special zone.

According to Du, Phu Quoc SEZ can develop tourism, while Van Don would have great development opportunities if it links with the Chinese economy. 

Meanwhile, it is still unclear what could be the ‘key economic branches’ for Bac Van Phong.

Nguyen Dinh Cung, head of the Central Institute of Economic Management (CIEM), doubts that the three SEZs would succeed in developing hi-tech industries, saying that even Hanoi and HCMC, which have the greatest advantages, still cannot do this.

Sharing the same concern, Nguyen Mai, an expert on foreign investment, noted that Samsung turned down land plots in Dong Anh and Hoa Lac Hi-tech Park offered by the Hanoi People’s Committee to set up an R&D center with 3,200 engineers. 

Samsung said that hi-tech engineers preferred to work in the central area of Hanoi.

MOF has been warned that balancing receipts and expenditures would be a heady issue for the ministry because provincial authorities have also asked for the same measures.

Quang Ninh, where Van Don SEZ is located, for example, has proposed retaining 100 percent of local tax collections until 2030.

US$1=VND22,000

 

Source: VietNamNet

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