VNEconomyNews.com - With the fall of 10 grades in the 2010 provincial competitiveness index (PCI) report, Hanoi now ranks the 43rd among 63 cities and provinces in provincial competitiveness. Hanoi is also the locality which has received most complaints about the land access opportunities. However, the low ranking proves to be not a surprise in the eyes of Hanoi’s officials.
Why has the capital city’s economy not been developed to be commensurate with the great potentials, and why has the 2010 PCI of Hanoi fallen by 10 grades, were the main topics for analysis during the meeting held several days ago by the Hanoi’s authorities.
Hanoi’s Mayor, Nguyen The Thao, said that PCI is a recognized index, therefore, it has a very big significance. However, he stressed that the index does not reflect the attractiveness of the investment environment. Hanoi always receives the applications from enterprises for making investment in the city, while other cities and provinces have to “lay red carpets” to attract investors.
As too many enterprises express their willing to invest in Hanoi, the city’s authorities have to become more selective about investors by setting up strict rules to “filter” investors. The investors have to join bids to get the right to undertake projects and to prove their financial capability.
“In general, only one enterprise is accepted to make investment in Hanoi out of 10 enterprises making applications for making investment in the city. That explains why other enterprises feel unsatisfactory with Hanoi,” Thao said.
However, the city’s mayor admitted that the city still cannot take full advantage of the great potentials of the locality to develop its economy. Especially, knowledgeable workers still cannot be used in the most effective way, while the land use and investment efficiencies are not high and the productivity remains low, which are the main reasons which have made the city fall in PCI grades.
Thao went on to say that in the time to come, the city will have to focus on improving the investment efficiency, competitiveness to strive for rapid but sustainable development.
Nguyen Minh Phong from the Hanoi Socio-Economic Development Institute, also said, that Hanoi has fallen grades in PCI because of the lack of land which does not allow the city to accept all investors. It has to choose few investors, the best ones, and refuse the others.
However, Phong said, in order to improve the competitiveness, Hanoi needs to heighten the transparency in investment licensing, provide more information, speed up the administration procedures, and cooperate closely with the Vietnam Chamber of Commerce and Industry (VCCI) in order to bring a more comprehensive viewpoint to the agency.
Leaders of the Planning and Investment Department of the city also said, that Hanoi’s PCI is low because the local authorities are not dynamic enough and a lot of problems still exist in the management and operation of the local authorities.
Hanoi is striving to obtain the GDP growth rate of 12-13 percent in 2011-2015, and the income per capita of 82-86 million dong per annum. Especially, Hanoi will take necessary measures to improve the competitive edges and develop economy in a sustainable way
However, many participants, who attended the meeting last week, showed their worry that Hanoi may not obtain the set targets, since the GDP of the city was only nine percent in the first three months of the year.
According to Luu Tien Long, Director of the Hanoi Industry and Trade Department, Hanoi now has 35 key industrial products, but the industrial production value proves to be not commensurate with the potentials. There are 45 industrial parks in Hanoi, but only four of them have water treatment systems.
Deputy Chair of the Hanoi People’s Committee, Nguyen Huy Tuong said that it is necessary to make heavier investment to help enterprises make key products. Lamp producers, for example, now want to renovate the production technologies, but they do not have money. Therefore, it is necessary for the city to build up reasonable policies to support enterprises and ask them to renovate technologies.