Vietnam seeks to increase economic efficiency of Northern hub


The conference on seeking solutions to further develop the northern key economic region opened in the northern province of Hung Yen on 25 June, hoping to open a new chapter for regional economic development in the months to come.

Prime Minister Nguyen Xuan Phuc highlighted the development of the region. Photo by TNMT newsletter.

The event, which attracted the participation of Prime Minister Nguyen Xuan Phuc, deputy prime ministers and leaders of ministries, cities, and provinces, as well as domestic and international businesses, focused discussions on solutions to sustainable investment attraction, logistics services, and human resources development in the Fourth Industrial Revolution, transport, sci-tech and innovation, and tourism, among others.

Addressing the conference, Minister of Planning and Investment Nguyen Chi Dung said that together with improvements, the region now faces some problems that need to be solved to promote regional development in the future. Although service is the spearhead industry in the region, it has yet to grow sustainably. In 2016, the industry grew by 9.05%. The rate, however, fell to 7.54% in 2018.

The electronics industry only focuses on assembling and outsourcing with low added value. The development of hi-tech products aligning with the development of R&D centres remains weak. FDI projects concentrating on labour-intensive sectors and cheap labour advantages remain numerous. The Provincial Competitiveness Index (PCI) of some regional cities and provinces remains low and environmental pollution remains a hot issue.

Prime Minister Nguyen Xuan Phuc highlighted the development of the region. He also asked relevant ministries and regional localities to work closely on the possible solutions to increase the efficiency of regional co-operation.

“The northern key economic region should be the pioneer in the development of sci-tech and innovation activities, digital economy, circular economy, and green growth,” said the government leader.

Looking forward, the gross regional domestic product (GRDP) is aimed to reach 9% in 2016-2020, while GRDP per capital will increase to USD5,500. In addition, the northern key economic region’s export turnover will make up 32% of the country total by 2020, while the number of trained workers will rise to 80-85%by 2020. By next year, 98% of urban solid waste, and 97% of medical waste will be treated, while more than 90% of industrial parks and export-processing zones will have standardised concentrated wastewater treatment facilities.

The northern key economic region comprises of seven cities and provinces – Hanoi, Haiphong, Quang Ninh, Hai Duong, Bac Ninh, Hung Yen, and Vinh Phuc – with a total GDP making up 32% of the country’s and annual export turnover accounting for over 30% of the country’s total.

Over the past years, the region has made great achievements, contributing significantly to the national social-economic development. In particular, transport network has been developed significantly, helping boost connectivity among regional localities. Big expressway projects include the Hanoi-Haiphong, the Hanoi-Cau Gie-Ninh Binh, the Hanoi-Thai Nguyen, the Hanoi-Lao Cai, the Ha Long-Haiphong expressways, while airports such as Noi Bai, Cat Bi, and Van Don and important seaports such as Lach Huyen and Cai Lan provide important regional and global connectivity.

In the 2016-2018 period, the GRDP grew 9.08% on average, while GRDP per capita rose from USD4,164 in 2016 to USD4,813 in 2018, which is 86% higher than the country’s average.

The regional economic structure changed positively towards increasing the contribution of non-agricultural sectors. The industry and construction sectors continue to be the pillars of regional development, attracting many big investment projects focusing on Hanoi, Bac Ninh, and Haiphong. In 2016-2018, these two regional industries contribute nearly 40% of the country’s GDP, focusing on key industries such as electricity, electronics, automobile manufacturing, shipping, textile and garment, and supporting industry.

What is more, the business climate has improved. Regional foreign direct investment (FDI) inflows in 2016-2018 ranked second nationwide, just behind the southern key economic region with the total registered capital of USD32.1 billion, or 27% of the country’s total.

Ywert Visser (on the left), DBAV Board Member and Vice Chairman of EuroCham, presented at the conference. Photo by VTV.

Healthcare, education, and environmental protection have also improved. Specifically, in 2018 67.8% of the regional workforce consisted of skilled employees, higher than the country’s 58.6% average, with Hanoi and Hai Duong named among the localities having the highest numbers of skilled manpower. IT has continuously developed strongly, with the presence of leading international groups namely Samsung, LG, Canon, and Microsoft, thus contributing to increasing the added value of industrial products.

In the first five months of 2019, the growth momentum continued. FDI reached USD7.025 billion, while the index of industrial production (IIP) increased from the same period last year. For example, the IPP of Haiphong ascended by 23.06%, Quang Ninh by 13.26%, and Hai Duong’s by 9%. Moreover, total retail sales and service revenue of the region were up 12.5% on-year.