Lao Cai Bettering Business Environment, Enhancing Investment Attraction

 

In the face of domestic and international economic slowdown, Lao Cai province achieved encouraging results in investment attraction, I think.

 

With regard to domestic direct investment (DDI), the province has to date licensed 524 DDI projects with a total registered capital of VND70,891 billion. In the first 10 months of 2016, as many as 19 DDI projects worth VND2,655 billion were approved by the provincial government. Licensed projects involved in various investment fields aimed to tap local potential such as mining and downstream mineral processing, tourism service, import and export, energy and rural agriculture. Large-scaled projects included Fansipan Sapa cable car project (VND2,200 billion in the first phase); Noi Bai - Lao Cai Highway to Sa Pa Town, Sa Pa District (VND2,518 billion); Lao Cai Airport (VND5,400 billion), 5-star Accor Hotel in Sa Pa Town invested by Sungroup (VND1,500 billion) and DAP fertiliser factory No. 3 invested by ThaiGroup Joint Stock Company (VND4,000 billion).

 

Regarding foreign direct investment (FDI), Lao Cai province now has 27 valid FDI projects with a combined registered capital of US$505 million, mainly engaged in industry, tourism and service. Typical projects included Lao Cai iron and steel plant project (US$337 million), Seo Chung Ho hydropower plant (US$38.8 million) and Aristo Hotel (68 million). Particularly, in the first 10 months of 2016, Lao Cai drew US$14.9 million (equivalent to VND333 billion) of FDI capital and allowed existing projects to add US$8.97 million (equivalent to VND200 billion). In the fourth quarter of 2016, the province will grant a new investment licence to a US$18 million power cable production project to a South Korean investor.

 

In early 2016, Lao Cai announced the list of 25 projects calling for investment capital and seven out of 25 these projects had investors as of October 2016 with a total registered of VND14,105 billion. Notably, Accor Hotel was estimated to cost VND1,500 billion.

 

Needless to say, investment attraction achievements have affected socioeconomic development from urban to rural areas, helped improve livelihoods of local people and reduce poverty in a sustainable manner. Important projects are engaged in mineral processing, metallurgy and high-grade hotel construction. Completed projects have contributed to increasing budget revenue, speeding up industrial, commercial and service development, restructure the local economy, ensure national defence and security, and increase jobs for local people. Improved investment, business and production environment, completed infrastructure in industrial parks and border gates, and guaranteed security are reflected in its provincial competitiveness index in the past year, which is always in the Top 10.

 

 

From activities and achievements in improving the investment and business climate in the past years, I personally think that good experience to do this work as follows.

 

Firstly, having the political will of provincial leaders, particularly the Provincial Standing Party Committee, the Provincial People’s Council and the Provincial People’s Committee, to provide the most favourable conditions for local enterprises to invest in the locality and provide the most essential support for the community according to the law. Then, their determination will spread to lower authorities.

 

Secondly, concretising the political will entails effective implementing and monitoring methods based on local realities with specific solutions as follows.

 

- Mechanisms and policies: In addition to central regulations, Lao Cai province issue particular mechanisms and incentives based on local actual conditions to encourage domestic and foreign investors to do business in the province. Remarkable policies include agricultural production development encouragement policy, forestry development encouragement policy, industrial development encouragement policy, and investment incentive policy for Lao Cai Border Gate Economic Zone. Moreover, for specific projects and cases, the province has appropriate incentive mechanisms for land rents and site clearance, and corporate income tax to assist investors to carry out investment projects to ensure progress and improve capital use efficiency.

 

- Administrative procedure reform: The province continues to apply effective one-stop single-window mechanism in combination with information technology application and review administrative procedures to abolish unnecessary ones.

 

- Setting up external communication channels with businesses and investors: The province has set up a business information and support committee to assist enterprises to deal with investment administrative procedures and advise local authorities and agencies to tackle problems and queries concerning investment, production and business from individuals, organisations and enterprises in order to further improve the investment environment to draw resources for local investment, business and tourism. Every year, the province hosts meetings with local enterprises to learn about their demands.

 

- Grassroots reform: The province built and announced the District Competitiveness Index (PCI), becoming the first province/city in the country to rate, assess and announce this index. After two years of pilot implementation, the province has made positive impacts on improving and boosting the capacity of handling corporate issues at grassroots level.

 

- With regard to implementation monitoring: Based on annual investment environment improvement plans as well as registered plans of localities and agencies, the province will perform objective and transparent assessments to figure out good and bad points. In addition, accountability and performance assessments are done regularly, particularly with respect to service to enterprises. The province rotates civil servants and officials to nip corruption in the bud.

 

In the next five years, the province will attract projects using advanced environment-friendly technologies and effectively impacting socioeconomic development.

 

- Industrial and basic construction sectors: The province will give priority to downstream mineral processing projects, technical infrastructure construction projects in western industrial and economic zones like Western Lao Cai Industrial Park and Expanded Border Gate Economic Zone, and supporting and new material projects.

 

- Tourism and service sectors: The province gives priority to local tourism projects in potential areas like Sa Pa and Bac Ha districts, services projects in Lao Cai Border Gate Economic Zone and Lao Cai City, as well as trade, service and tourism projects across the province.

 

- Agricultural sector: The province focuses on large-scaled, high-tech agricultural production projects to engage in production and supply value chains based on local climatic and terrain characteristics. Coldwater aquaculture projects and cattle husbandry projects are also encouraged.