Thanh Thuong and Trung Chanh
Entrepreneurs sign cooperation agreements at the Conference on Investment Promotion for the Mekong Delta in 2013 in Vinh Long Province - Photo: Trung Chanh
At the Conference on Investment Promotion for the Mekong Delta in 2013, localities in the country’s rice basket presented 138 key projects in need of VND456 trillion in invested capital, including some VND40 trillion of foreign direct investment (FDI). The two-day event is organized by the Southwest Steering Committee, the Ministry of Planning and Investment, and the State Bank of Vietnam.
Low investment
Nguyen Phong Quang, in his keynote address at the conference, said the Mekong Delta was in need of funds to accelerate its socioeconomic development. Most of the 138 projects put forth this time focus on infrastructure, farm produce and food processing, industrial development, and tourism, which are all considered the bottleneck in the Mekong Delta’s development, he said.
According to Quang, efficient investment into above-mentioned areas will pave the way for the Mekong Delta to bolster its economy.
However, the Mekong Delta has lagged other localities in attracting investment, especially FDI.
A report by the Ministry of Planning and Investment shows that the whole delta attracted only 45 FDI projects in the January-September period worth US$269 million, accounting for nearly 3% of the total FDI pledged in the country in the period.
Explaining the hesitation of foreign investors towards the Mekong Delta, Vo Hung Dung, director of the Can Tho branch of the Vietnam Chamber of Commerce and Industry, pointed to underdeveloped infrastructure, lack of quality human resources, poor services, and complicated investment procedures among others.
Restructuring imperative
However, many experts at a seminar on credits as part of the Conference stressed that capital shortage is not the biggest bottleneck hindering the Mekong Delta’s development, but rather the region’s inadequate economic structure.
The region should restructure its economy so as to add values to its products and join the supply chain, they said.
Nguyen Viet Manh, head of the Credit Department under the central State Bank of Vietnam, noted that credit supply for the Mekong Delta was still growing well but its economic growth remained stagnant.
The amount of total outstanding loans for the delta as of end-September had risen 11.05% against last December to VND305.3 trillion, or some US$14.5 billion, accounting for 9.24% of the total amount of credits for the entire economy. Credits for agriculture and rural development also rose 11% to VND123 trillion, Manh said.
He stressed that strong credit growth for the Mekong Delta helped the region little as its economy was characterized by scatter production and poor business management that had affected the region’s prestige and brands. Undercutting among enterprises in the region, and thinly-spread and inefficient investment have also hindered the region, Manh said.
Rice, fisheries and fruits are mainstays of the Mekong Delta, but production of such items is often pulled back by the global market’s price volatility.
Le Tham Duong, a financial expert, told the seminar that falling interest rates in recent months so access to credits is no longer a problem for the Mekong Delta, so financial leverage for the Mekong Delta is not necessary.
Duong called for solutions to restructure the rural economy, such as developing large-scale farming, organic vegetable growing, and boosting the processing industry to add values to the delta’s production.
The Conference on Investment Promotion for the Mekong Delta in 2013 in Vinh Long Province is part of the Mekong Delta Economic Cooperation Forum, which is due to wrap up in Vinh Long Province today.
Đăng ký: VietNam News