Hanoi affirms its position as an economic locomotive

Wednesday, 2019-10-09 16:39:10
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Hanoi has actively implemented many solutions to mobilise resources to invest in infrastructure construction.
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NDO - Economic development is one of the key tasks of the capital city of Hanoi. Over the past time, the city has actively implemented many solutions to mobilise resources to invest in infrastructure construction, improve the business environment, and turn the capital into a dynamic economic centre with a fast growth rate, and contribute significantly to the national budget. Hanoi has affirmed its position as an economic locomotive, creating a driving force for the development of the northern key economic region and the Red River Delta.

A dynamic economic centre

Located in the centre of the Northern Delta with favourable natural conditions, transportation and abundant human resources, Hanoi is not only a national political-administrative centre and a large cultural and scientific centre. It has also plays a role as one of the two largest economic locomotives of the country, and the driving force for development of the Capital Region, the northern key economic region and the Red River Delta.

Director of the Hanoi Department of Planning and Investment Nguyen Manh Quyen said that in order to carry out this task, the city will promote economic restructuring, in association with renovating the growth model towards improving quality, efficiency, and competitiveness. The economic structure has been shifted towards modernisation in line with the orientation in the process of industrialisation and modernisation of the country, by increasing the proportion of service - trade, industry - construction sectors, and reducing the proportion of agriculture in the gross regional domestic product (GRDP), with a focus on developing tourism into a key economic sector.

Over the past three years, the city has concentrated on renovating information dissemination, investment, and promotion of tourism; implemented a strategic cooperation programme with Cable News Network (CNN); attracted many social resources to invest in infrastructure system and tourism products. Thanks to these great efforts, tourism achieved the fastest growth among economic sectors with the average revenue increasing by 12.1% per year.

Hanoi has also focused on developing processing, manufacturing and high-tech industrial products with high added value. Facing the requirements of administrative reform, building an e-government and a smart city, since 2016, the city has promoted the development of the information technology industry by building concentrated IT zones and developing software products, digital content, and IT services. So far, the city has established four concentrated IT zones with more than 11,200 enterprises operating in this field, an increase of 51% compared to 2015, reached a total revenue of US$10.1 billion, and created jobs for 185,000 workers.

Besides, in the last two years, Hanoi has started to develop the cultural industry - a new economic industry to exploit advantages of unique heritages, monuments, craft villages and festivals of the city with an aim to create cultural and creative spaces.

In 2018, the value added of Hanoi's arts and entertainment sector reached about US$196.5 million, exports of handicrafts reached US$192 million. Though the economic value brought about is not yet high, it is considered a promising new direction and an important foundation for Hanoi to qualify to join the “Creative Cities” network around the world.

Mobilising resources for development

Chairman of the Hanoi People’s Committee Nguyen Duc Chung said that with the goal of building and developing Hanoi into a modern city with the average GRDP growth reaching from 8.5 to 9% per year, the average income per capita from US$6,700-6,800 a year, the city needs a total social investment of VND2.5-2.6 million billion for the 2016 - 2020 period. Of which, 20% is sourced from the state budget used for framework technical infrastructure projects and projects for socio-economic development, whist the remaining 80% of investment capital should be mobilised from domestic and foreign investors.

Therefore, in the last three years, the city has built supportive mechanisms and policies to mobilise economic sectors to invest in, reduce budget spending, and strive to improve the investment environment in order to turn Hanoi into a safe, friendly and effective destination for investors.

Based on the IT platform, the city has created a fundamental change in building an e-government to reduce time and costs for businesses and thus more efficient . Up until now, public services directly related to enterprises such as business registration, tax declaration, payment, customs, social insurance, etc which can be implemented online.

The city has also instructed departments and agencies to simplify administrative procedures, thus the time for solving administrative procedures in business registrations is reduced by 30%, in investment areas by 60% and in the planning and land field by 30-50%...

Hanoi has also focused on developing processing, manufacturing and high-tech industrial products with high added value.

Positive changes in improving the investment environment of Hanoi are highly appreciated by the business community. In 2018, Hanoi climbed 15 spots in the Provincial Competitiveness Index (PCI) to rank among the top 10 provinces and cities nationwide. According to a representative from Vietnam Grand Prix Company, the enterprise was established in November 2018 to invest in building and organising Formula 1 racing. The process of establishing this enterprise and clearing the ground was conducted very urgently by the authorities of Hanoi and Nam Tu Liem District. In March, 2019, the company received clean ground for construction in order to promptly organise the first racing in early April 2020.

Since 2016, the number of newly-established enterprises reached nearly 93,000, with a registered capital of VND280.1 trillion, 1.17 times higher than the 2011-2015 period. Total social investment capital has grown steadily over the years, an average increase of over 10% per year, reaching more than VND340 billion in 2018. In particular, the proportion of state investment capital decreased gradually, in 2017 accounted for 39.3% of total investment capital; investment from the domestic private sector increased accordingly, reaching 51.1%.

Non-budget investment capital of domestic enterprises reached VND621 trillion. The city attracted US$20.28 billion in foreign direct investment (FDI), 3.24 times higher than the 2011-2015 period. Hanoi has continuously led the country in FDI attraction. Prominent among the off-budget investment projects is the Smart City project on an area of 272 hectares with a total investment of over US$4.1 billion of the consortium of BRG Group (Vietnam) and Sumitomo Group (Japan); Vingroup Group's project to build Ring Road 2 worth VND9.5 trillion.

Rapid economic growth, abundant investment resources have positively affected the lives of Hanoi people both physically and spiritually. Leaders of the Hanoi City People's Committee said that the average economic growth of Hanoi in the 2016-2018 period was 7.2% per year.

The scale of the economy expanded, the GRDP in 2018 reached VND 920.27 trillion, and the average income per capita reached VND117.2 million, equivalent to US$ 5,134. As a result, many social welfare works have been invested in, contributing to improving the quality of the life of the people. Up until now, 100% of health stations at communal and ward levels have been invested to meet national standards of health. The number of schools meeting national standards and the number of communes meeting new-styled rural criteria exceeded the set targets, finishing two years early than the goal set for the whole term.

Not only contributing positively to the state budget, ensuring social security for the people, Hanoi has also promoted its leading role in in the northern region, the northern key economic region, and the Rtyged River Delta. The city has actively participated in and coordinated in the process of formulating and implementing socio-economic development master plans with localities, strengthening links in many fields, including links in the field of trade and tourism.

65 years after the Capital's Liberation Day, Hanoi's economy has experienced a comprehensive development, but there are still some limitations such as the knowledge economy and high-tech applications have not yet developed strongly. The quality of growth and some indicators of provincial competitiveness are still low, economic restructuring is still slow compared to requirements.

According to Hanoi authorities from now to 2025, the city will mobilise resources to develop the economic space in the expanded Hanoi area, with a focus on completing three satellite urban areas of Hoa Lac, Soc Son and Phu Xuyen, as well as investing in new industrial parks and complexes as planned, attracting more investment and putting the Hoa Lac High-Tech Park into full operation.

Along with that, the city will also focus on developing in depth on modernising economic sectors with a growth model based on innovation, improving competitiveness and added value of the economy; and further promoting its position as an economic locomotive of the country, creating a driving force for the development of the northern key economic region and the Red River Delta.