Hanoi strives to restore business, promote economic growth

Monday, 2020-07-06 17:35:58
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Production lines at Vsmart Electronics Factory at Hoa Lac Hi-tech Park in Thach That, Hanoi. (Photo: DANG ANH)
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NDO – Fostering investment is one of the solutions that Hanoi has pursued over the past few months in order to rejuvenate and promote the economy after the social distancing order ended. City authorities have also made every effort to reach the highest possible socio-economic targets in 2020 with projected GRDP 1.3 times higher than the average national GDP.

Receiving a new wave of investment

At the ‘Hanoi 2020 - Investment and development cooperation’ conference held on June 27, the city granted investment certificates to 229 projects worth approximately US$17.6 billion and signed 38 memorandums of understanding on investment cooperation worth US$28.6 billion.

Of the total projects, 100 projects are domestically invested with a total registered capital of VND227.49 trillion (US$9.8 billion), 22 projects are foreign direct investment (FDI) projects with total capital of US$5.7 billion and 107 are public investment projects.

The number of licensed projects at this conference was five times higher than that at the same conference in 2016 and registered capital also increased 11 times over.

These are impressive numbers in the context of the COVID-19 pandemic, demonstrating the city’s efforts to mobilise resources to quickly rejuvenate the economy and promote growth.

Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc said that Hanoi is one of the first few capitals in the world that has taken control of the coronavirus pandemic and is moving through the various stages of restarting the economy. With this advantage, the city is at the forefront of receiving a new wave of investment which is currently shifting location due to the impacts of the pandemic.

The city authorities have made great efforts to promote administrative reforms and improve the investment environment to turn Hanoi into a reliable and effective investment destination.

FDI attraction in the 2016-2020 period was estimated at US$25 billion, 3.9 times higher than that in the 2011-2015 period. The private sector has seen rapid development, continuing to be an important driver for the city’s economy.

Approximately 130,000 enterprises have been established over the past five years, 1.6 times higher than the figure for the 2011-2015 period, raising the total number of enterprises in Hanoi to nearly 290,000.

Abundant investment resources have created a positive influence on the lives of the people while promoting economic restructuring in a positive manner. Various new urban areas have been built, changing the face of the city and improve the living standards of the people.

Striving for high economic growth

The COVID-19 pandemic has had a serious impact on the national economy and the Hanoi economy in particular. To achieve economic growth of 1.3 times higher than the national economic growth, the city directed the whole political system and business community to join hands to combat the coronavirus pandemic and align to boost the economy.

The city administration has set a target of disbursing 100% of public investment in 2020 while facilitating enterprises and fostering administrative reforms.

In addition, the city has paid much attention to ensuring social welfare through providing financial support to needy and disadvantaged people affected by the coronavirus pandemic pursuant to Government directions. About VND474.2 billion (US$20.5 million) was granted to affected people by the end of May 2. An additional VND495.6 billion (US$21.4 million) is scheduled to be provided for freelance workers affected by the pandemic in the near future.

The city has also entrusted the Bank of Social Policy to provide loans worth over VND1 trillion (US$43.3 million) at a 0% interest rate to needy people, household businesses, and small businesses to overcome difficulties caused by the pandemic. Moreover, over VND17.5 trillion (US$757.8 million) worth of tax will be rescheduled and deadlines extended for local enterprises.

Various programmes have been implemented to stimulate domestic demand, promote consumption, boost exports and remove difficulties for enterprises over the past months including the organisation of trade fairs of agricultural products, a week of Vietnamese goods, a concentrated promotion event held in June, July and November this year, a tourism promotion event, and others.

Thanks to these ceaseless efforts, the city’s economy has gradually recovered, expanding 3.39% in the first six months of 2020. About 12,650 enterprises registered to establish in the period with a total registered capital of VND175 trillion (US$7.5 billion), up 9% over the same period in 2019. The city also posted US$4 billion in FDI capital in the six-month period and a six-month budget revenue estimated to reach 50% of the plan.

Despite the improvements to the investment environment, Prime Minister Nguyen Xuan Phuc said that Hanoi is not really attractive to large investors while administrative procedures, public apparatus organisation, and the implementation of public services still reveal inadequacies. The city should implement solutions to immediately handle these weaknesses so as to facilitate people and enterprises while limiting harassment.

With the economic growth results in the first six months of 2020 and solutions devised for the next period, it is believed that Hanoi will achieve an economic growth rate of 6-6.5% by the end of this year, 1.3 times higher than the average anticipated growth rate of the nation as a whole.