Attracting investment in border economic zones is difficult

	Quang Ninh: Adding 25 re-export enterprises through sub-border gates and Customs clearance points
	Dung Quat EZ seeks billions in investment
	Financial policies for development of economic regions.

Due to geographical location, most of border economic zones has run into difficulty to attract business investment in production and business. Photo: Hoai Anh.

The Ministry of Planning and Investment said that Vietnam's development plan for border economic zones to 2020 had been approved by the Prime Minister in Decision No. 52/2008 / QD-TTg of 25^th April 2008. Accordingly, there were a total area of ​​more than 660 thousand hectares and 21 of the 25 borderland provinces were established under the Decision of the Prime Minister. In addition, 4 provinces are expected to establish border economic zones.

In terms of performance, in recent years, the operation of border economic zones has played a very important role in the development of the economy of the province, the area of border economic zones in particular and the country in general.

Accordingly, the total import-export turnover through border economic zones achieved a high growth over the years. In 2015, total export turnover through the stock markets reached US$ 13.5 billion, an increase of 2.5 times compared to 2010 and an increase of nearly 8 times compared to 2005. The average growth rate of the period 2006-2010 and the period 2011-2015 reached 25 % and 20% respectively; higher than the growth rate of export and import of the country in the same period.

In addition, the report also showed that the total state budget revenues in the year 2015 reached more than 10,000 billion VND, doubling revenues of 2010, mainly in economic zones sharing borders with China.

As for the results of investment attraction: Till now, Vietnam’s border economic zones has attracted about 800 investment projects, including 700 domestic investment projects with registered capital of more than 50,000 billion VND and approximately 100 projects with foreign direct investment capital of US$ 700 million.

However, the report also outlined some problems for the model of border economic zones. Specifically, the general plan of the border economic zones and detailed plan in the implementation of the border economic zones had a slow progress and low quality. Some of the border economic zones lack of general planning construction, leading to the construction investment projects based only on the detailed planning of functional areas, which led to lack of uniform technical infrastructure and social infrastructure.

In addition, the size of capital has been quite small, so the infrastructure in border economic zones has not been synchronously invested and has not met development requirements. The border economic zones are often located in localities where the socio-economic conditions are difficult, so they mainly depend on the central budget to invest in infrastructure construction.

However, due to the limited budget resources, while the demand for investment and development of the large stock markets leads to much difficulty in deploying infrastructure in a uniform manner. At present, on average, the need for budget capital to invest in infrastructure in the annual turnover has reached about 1,500-1,700 billion VND, while the new budget has been about 600-700 billion VND per year.

In addition, the Ministry of Planning and Investment also said attracting investment in production and business in border economic zones had much difficulty, and there were many obstacles in mechanisms and policies to develop border economic zones.

Accordingly, due to geographical location, most of border economic zones has run into difficulty to attract business investment in production and business. In addition, the process of implementing mechanisms and policies for developing the border economic zones had some problems. In particular, there was no breakthrough policy for development of border economic zones and the lack of stability in financial institutions and policies.

What are incentives for special economic zones? VCN- The operation model, as well as a large number of special incentives for 3 special economic ...

All border economic zones had difficulties in mobilizing enterprises to invest in production and business, so there is a need for special and preferential mechanisms and policies. However, at present, the financial mechanisms and policies for development of border economic zones are based on current legal documents, so there are no specific incentives and lack of stability.