Strategic decision adopted to boost HCMC development

09:05 | 24/01/2018 Society

(VEN) - Ho Chi Minh City (HCMC) reached a gross regional domestic product (GRDP) growth of 8.25 percent in 2017, 0.2 percent higher than 2016. In late November 2017, the National Assembly ratified a resolution designed to enhance HCMC’s development.

strategic decision adopted to boost hcmc development

Growth targets

In 2017, HCMC reached a GRDP growth of 8.25 percent (0.2 percent higher than 2016), and a budget revenue of more than VND 347.98 trillion, about VND100 billion higher than expected.

The city business environment improved, while investment capital in the city totaled an estimated VND365.7 trillion, accounting for 35 percent of the GRDP and up 18 percent from 2016. Public investment efficiency improved, contributing significantly to technical and social infrastructure construction and upgrading.

The city’s economic structure shifted to service industries with high added value and competitive advantages. The nine key and strong service sectors represented 52.8 percent of the city’s GRDP.

Domestic and foreign investment experienced positive changes in accordance with the city’s socioeconomic development plan. In the first 11 months of 2017, 37,596 domestic enterprises totaling more than VND500.75 trillion in registered capital were established, while 55,042 other businesses registered changes in business lines or increased capital by a total of VND277.68 trillion plus.

HCMC attracted US$6.5 billion worth of FDI in 2017, accounting for 18 percent of the country’s total, taking the lead among provinces and cities nationwide.

The city focused on urban and infrastructure development, minimized environmental pollution and took the initiative in coping with climate change, while making strenuous efforts to control flooding and traffic accidents. It also accelerated administrative reform and corruption and waste control, sped up smart urban area and e-government construction, ensured social security and welfare, maintained political stability and social order and safety, and expanded and improved foreign relations and international integration.

However, the city is still facing many difficulties and challenges in economic development.

Specific policies

HCMC accounts for 9, 22 and 28 percent of the country’s population, gross domestic product (GDP) and budget revenue. Over the past 30 years, the city has reached an average economic growth of 10.7 percent per year, 1.6 times the country’s average, and labor productivity that is 2.7 times the country’s average.

However, investment efficiency in the city has slowed, human resources exploitation needs to be improved, and solutions and policies need to be formulated and improved to address traffic congestion and social security problems.

The National Assembly has adopted Resolution 54 on piloting policies specifically designed for HCMC, aimed at enabling the city make a development breakthrough.

The resolution allows the city people’s council (1) to change the rice cultivation land use purpose related to fields of 10 hectares upwards in accordance with approved plans after a public referendum, (2) issue investment decisions for city-funded Group A projects according to the Public Investment Law, and (3) propose that the government and National Assembly increase taxes by no more than 25 percent in some fields and apply some new fees.

Regarding employee income policies, the resolution permits the city people’s council to decide budget allocation for additional pay (no more than 1.8 times the stipulated salary) for city workers, and pay to specialists, scientists, and highly skilled professionals.

The city is working to promote implementation of BT (build, transfer) projects, and improve its investment environment. In late December 2017, HCMC announced its inter-sector working group on investment. The city people’s committee has asked the city party committee’s executive committee for recommendations on land policies, aiming to create a favorable development environment, ensure the city’s sustainable growth, and improve the city’s competitiveness.

The city people’s council will monitor the implementation of resolutions and is expected to promulgate legal documents in June 2018 in order to implement the Politburo’s conclusions and the National Assembly’s resolution on piloting policies specifically designed for HCMC. At the same time, the people’s council will propose that ministries and sectors amend and supplement legal documents, decrees and circulars in December 2018 in order to pilot the policies and ensure the city’s fast and sustainable development.

Ho Chi Minh City Party Committee Secretary, Nguyen Thien Nhan, said the National Assembly’s Resolution 54 on pilot policies specifically designed for Ho Chi Minh City is a policy breakthrough consistent with the city’s development after more than 40 years of unification and more than 30 years of the country’s renovation. The resolution is a driving force for the city’s development.

Thanh Duong