The keys to advance central region growth

The central region is being urged to upgrade transport infrastructure in order to maximise potential for growth

A conference of the central region’s economic development took place last week in Quy Nhon city of Binh Dinh province, with the overriding focus on seeking viable solutions to help the central ­region breakthrough further in the near future.

Attending the event, Minister of Planning and Investment Nguyen Chi Dung pointed out limitations that are hindering the region’s development, which include the modest economic scale and the sluggish, unmotivated growth of the region.

“Among 14 provinces in the region, only Thanh Hoa, Ha Tinh, Quang Ngai, and Quang Nam have large-scale projects to motivate growth while the rest have posted low growth rates, unable to avail of the strengths of the existing seaport and airport systems,” he said.

According to Minister Dung, some economic corridors have yet to tap effectively into the great attraction of industry and services, with exports increasing but the proportion still remaining low compared to the total export value of the country as a whole. The uneven pace of growth has prevented the region from developing in a synchronous and comprehensive manner.

The central region’s key economic zone, consisting of five localities, has not yet justified its role as the region’s growth engine. The gross regional domestic product ­proportion of the central region’s key economic zone over the national GDP in the 2016-2018 period dropped overall, from 7.89 per cent in 2016 to 7.79 per cent in 2017 before surging to 7.84 per cent last year.

Unsustainable yet surging revenue collection is also an issue. Accordingly, one-off and unstable revenue accounts for a large proportion, whereas revenue from land use fees and lotteries account for about 22-25 per cent, still a high proportion of total domestic revenue.

Another restriction pointed out by the minister is inadequacies in inter- and intra-regional transport infrastructure connections. The coastal ring route has not yet connected localities along the central coastline, the north-south, and east-west trunk roads that link the coastal area to the Central Highlands. Further, means of linking the coast with the midlands and mountainous areas have not yet been invested in or upgraded.

Risks of freshwater shortage, salinity, and drought are increasingly evident, especially in south-central provinces. Environmental pollution in economic zones, industrial parks, and industrial production facilities remains serious.

Foreign investment attraction into the region remains low as foreign investors and big corporations are reluctant to pour money into a region often hit by natural disasters and floods, and plagued by insufficient transportation.

The final limitation outlined by Minister Dung was the low quality of human resources, with the proportion of certified trained workers only accounting for about 22-23 per cent. Moreover, as the region has been living mainly on agriculture and fishery, industrial working discipline and professionalism are low, and the labour force requires further training. The poverty rate is still high, at 8.7 per cent compared to the country’s average of 6.8 per cent.

Furthermore, according to the minister, a lack of regional cohesion has added to the region’s investment attraction woes, with co-ordination among localities in the region remaining very limited. The connection between strategies, planning, infrastructure conditions, mechanisms, policies, and human resources also remains lax, resulting in shaping a disunited economic space.

Solutions for breakthrough

Addressing the conference, Prime Minister Nguyen Xuan Phuc stressed the important position of the central region as the yoke of the two ends of the country, and as “a crucial vertebra” in the national backbone.

PM Phuc believed that the region can promote its role of steadfast connection throughout national development. However, to spur this development, the region needs to be more proactive in seeking further investment inflows. He noted that despite accommodating many big projects, the central region shows shortcomings and unsustainable growth, not yet taking on the role of a regional economic growth ­nucleus.

“The local tax base in the region is generally small, and some provinces report low revenue. Therefore, the region needs to scale up efforts to boost revenue for the country and the localities, striving to gradually scale down subsidies needed from the central government, giving space for the government to invest in other essential fields,” the PM said.

As local infrastructure is still inadequate and insufficient, expansion of sea, road, and air transport systems can provide more favourable opportunities for the region.

PM Phuc, therefore, suggested that central localities stand in front to take advantage of the country’s new opportunities within the next 10-15 years. It should show its aspirations to forge ahead and be determined to soon become an area of fast and sustainable socio-economic development for the country.

“The central region must forge ahead as it concentrates all conditions for fast and sustainable development. Therefore, it must carry the spirit of ‘now or never’,” PM Phuc added.

In light of the region’s marine economic development strategy, meanwhile, it will focus on areas such as developing fisheries, aquaculture, fishing, and seafood processing; sea and island tourism, and western region tourism; seaports and logistics services; development of processing and manufacturing industries associated with seaports; and development of renewable energy, wind power, solar energy, and other energy sources.

As for a regulatory framework, the development planning of the central region must be made clearer, with favourable institutions for regional development, and resolutions and directives made compatible with the region’s reality.

To mitigate climate change implications, the major external problem that threatens the region’s development, relevant localities must have discussions to find appropriate solutions and effective crop transformation, according to the prime minister.

The prime minister also urged local authorities to cultivate a more competitive business environment, helping to turn the region into a lucrative venue to domestic and international investors.

PM Phuc assigned particular tasks to ministries and relevant government agencies. Accordingly, for the Ministry of Planning and Investment, national target planning must be boosted alongside regional planning, quality assurance, promoting the current planning, and reviewing difficulties to timely support, including creating a special mechanism for the central region.

Other tasks include proposing investment resources for building coastal roads, along with roads to the Central Highlands, and tackling drought and water shortages.

In addition, PM Phuc highlighted the importance of exploitation and management of resources, building regional logistics centres, and supporting localities with potential for renewable energy development.

Meanwhile, the Ministry of ­Science and Technology was ­assigned to build up technology and science incubation centres, as well as policies for human resources ­training, skilled labour, and local jobs creation, especially for the tourism, mechanical engineering, and processing sectors.