HCMC on its way to becoming Southeast Asian economic hub

10:54 | 10/02/2017 Economy- Society

(VEN) - Ho Chi Minh City has set strategic targets for 2017 and is expected to further pioneer in creating a competitive business environment and gradually become a leading economic center in Southeast Asia.  

hcmc on its way to becoming southeast asian economic hub

Maintaining growth

In 2016, Ho Chi Minh City reached or exceeded nine of its 12 targets, but failed to approach the clean water and industrial wastewater treatment targets. The city’s Provincial Governance and Public Administration Performance Index (PAPI), Provincial Competitiveness Index (PCI) and the Peer Assessment Rating Index (PAR-Index) have not yet been assessed.

Nonetheless, Ho Chi Minh City People’s Committee Chairman Nguyen Thanh Phong assessed that the city has achieved relatively high economic growth, with its 2016 Gross Regional Domestic Product (GRDP) increasing 8.05 percent compared with 2015 and equal to 1.28 times the country’s gross domestic product (GDP) growth. The city’s exports and agricultural development index soared 10.1 percent and 7.68 percent over the previous year, respectively. The city’s four major industries have taken the initiative in market expansion, equipment renovation, and product quality and competitiveness improvement.

About 36,000 new domestic enterprises were established in the city in 2016, taking the total newly registered capital to nearly VND496.6 trillion (including capital of newly founded companies and increased capital of existing businesses), up 35.8 percent from 2015.

Along with market research and development, the city has been gradually improving the efficiency of scientific research. It has supported 300 start-up projects and 700 creative entrepreneurs with startups through counseling, training and business connection and incubation.

Below expected levels

However, according to Chairman Phong, the city’s economy is facing many difficulties and challenges - its business environment and economic competitiveness remain below expected levels; growth is mainly made up of capital and workforce factors; science and technology application remains insufficient; many social resources in the city haven’t been tapped and used. And although total retail sales of goods and service revenues, industrial production, exports and imports in 2016 experienced growth, it was lower than the growth rate of 2015. City leaders have acknowledged that resources of both domestic and foreign private sectors are rich but haven’t been brought into play, and that governments at all levels had not played a constructive role. The city has set targets of an 8.4-8.7 percent GRDP growth and 50,000 new enterprises in 2017.

It also targets a state budget revenue of almost VND347.9 trillion in 2017, 15.79 percent higher than the 2016 estimate (VND300.45 trillion). Notably, the city began applying tax reductions and exemptions this year in accordance with international integration commitments. The city has formulated specific solutions to achieve the 2017 targets. It will prepare blueprints for developing itself into a smart city, focus on administrative procedure simplification, increase administrative transparency, promote information technology application, improve administrative reform efficiency, build e-government and gradually become a major economic center in Southeast Asia.

Thanh Duong