Decentralisation needs refined

Decentralisation needs refined

The Ministry of Planning and Investment is pushing for a revised decentralisation policy to muscle-up foreign direct investment inflows.

The ministry will ask the Vietnamese government to allow it and other related ministries to appraise foreign direct investment (FDI) projects granted with special incentives, acquiring large chunks of land or those affect the nation’s economy, before proposing the prime minister for in-principle approval, according to the Ministry of Planning and Investment’s (MPI) Foreign Investment Agency (FIA).

“The Vietnamese government will approve these projects and then municipal and provincial people’s committees will be in charge of granting those with investment certificates,” said FIA director Do Nhat Hoang.

“The fine-tuned policy will promote creativeness and responsibility of local governments and ensure the united management of the central government. This would create favourable conditions for foreign investors, but also supervises operations of the investors,” he said.

According to the MPI, many local governments have granted investment certificates for too many ineffective projects since 2007. Often foreign investors failed to start construction with many investment certificates revoked.

Before 2007, the MPI was the government authority with the right to licence FDI projects in Vietnam, together with Hanoi and Ho Chi Minh municipal people’s committees, and municipal and provincial industrial parks and export processing zones management authorities. The Investment Law 2005 taking effect on July 1, 2006 put an end to the MPI’s status as an FDI licencing agency and gave full power to local governments, plus industrial parks and export processing zones management authorities. The decentralisation policy is said to shorten time for licencing FDI projects and improve investment climate in the country.

Hoang said while cities and provinces were trying their best to attract potential foreign investors, the decentralisation policy needed to be fine tuned.

“Many local governments even are puzzled when appraising FDI projects of large scale, or projects having complicated technology and negative environmental impacts,” he said.

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