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Attracting investment to Hanoi: Specific mechanism policies are key
Ngoc Thuy - Nguyen Anh 17:11, 2017/09/16
Demand for investment capital in period 2016 – 2020 of Hanoi is nearly 110 billion USD (more than 1.8 times compared with period 2011 - 2015).
Former Deputy Head of Central Institute for Economic Management (CIEM) Dr. Vo Tri Thanh said, Vietnam has always been interesting destination for investment, but it is necessary to remove political barriers to attract private sectors participating in projects.
 
Former Deputy Head of CIEM Dr. Vo Tri Thanh.
Former Deputy Head of CIEM Dr. Vo Tri Thanh.
The local state fund of Hanoi can only finance 20% development demand for the city in the midterm period of 2016-2020. So where can Hanoi mobilize resources from?

At present, investment fund for projects in Hanoi comes from 3 sources: fund for public investment; ODA fund and social resources in form of Public – Private Partnership. As such, the limitation of state fund is not only in Hanoi but also other provinces, ODA fund allocated by the government is still important, however Hanoi and Ho Chi Minh have to relend 80% and allocate 20% of the investment fund. In the context of ODA fund is decreasing and not so “cheap” like before, in addition to being controlled by debt ceiling. In order to efficiently implement projects, Hanoi has to focus on solutions to mobilize resources for investment, in turn meet the investment demand for priority projects.

With difficulties in getting investment fund, the third sources are social resources, but it is not easy?

Hanoi is not only the heart and image of Vietnam, so that infrastructure development in Hanoi has significant meaning to Vietnam. This is both advantage and challenge for the city. Hanoi has high potential for economic development, high consumption and human resources with many investors expressing interests. However, it is important that the leaders to have courage in making breakthrough to use resources efficiently. There remains shortcomings from the macro and micro level, however, if we want to have a big impact, we should look for leading investors with professionalism and modern technologies.

Many investors want to cooperate with Hanoi, however difficulties the city is facing coming from the lack of specific mechanism policies. So can Hanoi apply the Law of capital to attract investment?

The request for specific mechanism policies should be considered to implement projects and speed up progress. However, specific mechanism policies must stay within the law and ensure transparency and clarity. Based on this foundation, Hanoi proposed to the government to review and have solutions to remove difficulties, accepting Hanoi to have specific mechanism policies. In reality, Hanoi has already had some specific mechanism policies during the process of implementing the Law of Capital, which allows Hanoi to study the model of managing based on city government. 

Hanoi proposed to be allocated state fund in advance to finance some urgent projects; at the same time proposed the government to be authorized in choosing investors righ from the detailed masterplan development. What do you think about this?

From my standpoint, competitive bidding will get positive results. So that, the process of selecting bidders must be transparent and clarity; the project will be speed up while maintaining the quality, safe and sustainability. Especially, the selecting process must be in detail and accurate. But if Hanoi is given specific mechanism policies, the city must prove there is substantial development. There are two solutions: firstly, select specific project to implement; second is pilot a project along with efficiency for the benefit of provinces. We both support reform, as long as they are implemented with transparency, explanation and responsibility.

With regard to social resources mobilization, Hanoi is considering to apply both BT (buid – transfer) and BOT (build – operation - transfer) to attract enterprises. However, with recent problems related to BOT and BT, what do you think about the solution for Hanoi?

In the context of state fund limitation, I support the idea of Hanoi. However, we should take note on whether the cooperation is reasonable and fair, the partner has sufficient financial capabilities, modern technologies and responsibilities; Public – Private Parnership but without using the state fund; there must be a panel to study requirements requesting enterprises carrying out projects with capabilities on technologies. The government must have qualified experts to work with private sectors. Hanoi has to improve efficiency in management and strictly deal with inefficient investment.

Thank you!

 
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