Phu Tho Aggressively Attracting Investment to Bolster Economy

In face with limited state and local budgets, FDI is identified as the optimal solution to offset the lack of investment for socio-economic development. To accomplish the objective of being the industrial province by 2020, FDI plays a really important role in solving problems and exploiting the potential resources of the province.

 

 First of all, the foreign investors help create more jobs for the local residents in in the field of light industry, which requires a large amount of labour, such as textiles, footwear and manufacturing. In particular, the labour recruited for FDI enterprises often meets higher requirements and undergoes the training process before work. That contributes to raising the level of general skills of the human resources in the province.

 

 In addition, most of the foreign enterprises of Phu Tho invest in the industry, which will help increase the province's industrial potentials and accelerate the economic restructuring towards industrialisation and modernisation by increasing the share of industry in GDP. Moreover, through cooperation and joint ventures with FDI enterprises, local businesses will have the opportunity to acquire modern technology, advanced management expertise and gradually approach the international market, raise labour productivity, reduce production costs and improve product competitiveness.

 

 It is easily recognised that attracting FDI is to improve the difficulties of capital investment, exploiting the available potential and contributing to the restructuring of the local economy.

 

 Since the re-establishment of the province since January 1, 1997, Phu Tho has been trying to find solutions to develop the economy of the province. However, the shortage of capital is still a major challenge for the economy, which is accompanied by outdated technology and low labour productivity, caused by low accumulation of the local economy. To break that "vicious cycle", over the years, Phu Tho has taken advantage of "poked shot from outside" through a series of measures to attract FDI and perfect the mechanisms and policies to promote the effective implementation of the project.

 

Despite many difficulties, as of June, 2014, the province had attracted investment and issued the investment certificates for 132 operating FDI projects with total investment capital of US$687.4 million. Particularly in 2013, under the tough situation of industrial production due to the economic downturn, decline of purchasing power of the market and rising production costs, Phu Tho focused on implementing comprehensive measures to support the market, leading an increase of 7.7 percent of FDI with a total investment of VND1.08 trillion. In particular, there are a number of major projects such as the electronic component factory supporting Sam Sung with the total investment of US$40 million.

 

Result of attracting FDI in 2013 is a next step and important evidence for the ability of attracting investment of Phu Tho, which has been gradually improving. Moreover, the increase of the investment capital to expand production scale and sales of the FDI enterprises will encourage both the authorities and local businesses to race for attracting investment and increasing investment efficiency.

 

With its central location of the northern mountainous area and the Northwestern gate of Hanoi as well as the bridge connecting Northwestern provinces, Hanoi and the northern provinces, Phu Tho is at the heart of the area of industry, production and processing of agricultural products, and forestry. The economic growth rate in 2013 was 6.43 percent. The agricultural and aquaculture production remains stable; the growth of commerce, industry and services, and construction is rather good; and the social security is guaranteed. The favourable geography in terms of economics associated with effectively operated FDI projects are operating in the area is good signs for future foreign investment in Phu Tho in the next phase.

 

To further promote the potential advantages, overcome the limitations and enhance investment, especially FDI in the province, Phu Tho has implemented a set of measures to improve the investment environment towards transparency, shortening procedures and provisions of most favourable conditions for investors. It is specified as follows:

 

 - Renewal of investment promotion:

In addition to the implementation of investment promotion programmes of the province, approved by the Provincial People's Committee, and annual investment promotion programme by the national ministries and functional agencies, Phu Tho facilitates and supports the businesses in the area to address the difficulties and obstacles in the implementation process of the project. This is one of the best solutions Phu Tho has adopted to accelerate the implementation of projects of the investors in the province effectively and practically.

 

 The province also proactively introduces the investment environment, the policies of the central government, and provincial incentives and supports through multiple central and local channels such as newspaper, radio, and electronic portal of Phu Tho Province and the functional departments; embassies and chambers of commerce in Vietnam; and domestic and international corporations to provide information about the investment environment in the province.

 

 - Reform of the administrative procedures:

 The province has effectively improved the provincial competitiveness index to promote the investment environment and sustain the business environment of the province.

 

Besides, the province adopts the "one stop" system to create the best environment for investors when investing in the province. For the projects beyond the industrial parks, the investors just need to work with only the Department of Planning and Investment and for those located in the industrial parks, the investors only work with the Management Board of Industrial Parks. This helps reduce time and inconvenience as well as save costs for the investors.

 

The province also offers incentives for specific investment projects in the area. Specifically, the investment projects of the province are beneficial to not only the privileges of the government but also provincial incentives, which are specified in Decision 04/2012/QD-UBND dated January 12, 2012 as follows:

 

The investors may select locations and areas to implement the project in accordance with the project's scope and planning, which are approved by the functional authorities. To encourage the investment project in the areas, the industrial parks and clusters have been planned.

 

- Investors have rights to choose the form of land allocation with collection of land use fees or land rent under the current regulations of the government and in accordance with specific regulations for each area of ​​the province;

 

- The investment projects in infrastructure and industrial parks as well as industrial clusters are supported not exceed 10 percent of the rent payable under the provincial land approved prices, after deduction of investment incentives as prescribed by current law.

 

- The province gives the budget support for compensation, and site clearance for the projects that are encouraged in the province. The project's owners are required to pay cash in advance to pay compensation, site clearance and land tax deduction or land use fees that have to be paid.

 

- The Provincial People's Committee directs the units to provide electrical services, water, and infrastructure to the fence zones and industrial clusters;

 

- The chairman of the province decides to support the key projects on the portfolio of the province in accordance with law.

 

Phu Tho is committed to creating the most favourable conditions for the FDI projects in the province and ensuring fairness in rights and responsibilities between the FDI enterprises and local businesses.