I attended a meeting on Saturday morning, 23rd March, between the HCMC Party Secretary, Chairman of the People’s committee and other City Leaders and representatives of Foreign Business Associations and Foreign Invested Enterprises.
Generally all foreign representatives were congratulatory on the achievements of the City to date and the development over the last 30 years.
In 2018, Gross regional Domestic Product increased 8.3% (higher than the national average) driven by the service sector which registered an 8.4% increase. Tax collection also registered an 8.3% year on year increase. The City’s export turnover grew 7.5% to reach US$ 38 billion and the international Visitors to the city recorded a record level of 7.5 million (an increase of 17%). Foreign Direct Investment increased by 11.8% to US$ 7.4 billion with FDI contributing 58% of the city’s exports.
The city is growing by 250,000 new inhabitants a year due to urban migration which is putting a heavy demand on housing facilities and the target per capita income for 2020 is over US$ 9,000 per capita..
There were 9 presentations from Business Group representatives including the British Business Group Vietnam (by myself as Chairman). The key issues raised in my paper were 1) Education and work place readiness for graduates and people entering the workforce, the need to develop blended learning programs with on line options, using workforce development initiatives to help improve productivity and efficiency; 2) Infrastructure and Pollution which needs to be addressed for HCMC to remain an attractive city for both expatriates and locals; 3) urgent need for improvements to the Ton Son Nhut airport facilities and surrounding infrastructure. Issues raised by other Business Groups included the continued need for further administrative reform, reconsideration of compulsory health and social insurance for expatriates, energy production and the encouragement of renewable energy sources; Issues related to licensing of FDI projects, transport systems and sale of real estate to foreigners.
In 2019 the City leaders expressed their commitment to removing barriers delaying major projects with specific reference to Metro Lines 1 and 2 and committed to completing Metro Line 1 in 2020 allowing for trials in early 2021. The leaders want to see the development of HCMC as a smart city and plan an innovation hub in the east of the city plus the plan is to develop a new 380 hectare Industrial Zone for High Tech and Innovation startups.
A further 26,000 hectares will be changed from agricultural to industrial use to facilitate the City’s development and the city has started to develop a strategy for AI, a plan for infrastructure services, a plan for international quality workforce in the tourism sector, and has listed 245 projects for development all these topics will be subject of strategy meetings and seminars in the next few months.
All in all a positive meeting with clear instructions from the City Chairman to the department leaders to work with the foreign business community and to: expedite a one stop electronic system covering 41 administrative procedures,; compile a monthly report of the difficulties of Foreign Business; to establish a working group for FDI approvals; to focus on a growth model for FDI approvals and eliminate non-productive investment; to tackle a list of 10 issues requested by FDI’s and get them resolved in 2019.
Having lived in HCMC for 26 years, I find it hard to ever see myself living elsewhere and am convinced that whilst some issues of concern may get worse before they get better, in the medium to long term, HCMC will be a very livable city, especially if we all work together to achieve this.
Kenneth M Atkinson
