FDI drips into Mekong Delta
FDI drips into Mekong Delta
The Mekong Delta has seaports and international airports, but due to its poor transport infrastructure and low labor skills, foreign investors do not want to pour capital into the region.
Stuck
According to VCCI, in 1988-2010, the Mekong Delta attracted $9.8 billion of FDI, accounting for 4.6 percent of the country’s total FDI. In 2011 and 2012, FDI in the region reached $1.6 billion (7.5 percent of the country). The provinces attracting more FDI include Long An (37%), Kien Giang (30%), Can Tho (15%) and Ca Mau (8%). Long An and Tien Giang attracted many FDI projects because they are adjacent to HCM City.
"The Mekong Delta provinces are attracting low FDI because it does not have logistics system from Can Tho and other provinces in the region to HCM City. The delta has Cai Cui and Can Tho ports, Can Tho airport, but the effect of these works was not really high. In addition, the labor force is not well trained so foreign businesses are afraid to recruit them," said Dr. Vo Hung Dung, director of VCCI Can Tho branch.
Mr. Motoyuki Nakamura, CEO of Tri Viet International Co., Ltd. (based in Tra Noc Industrial Zone in Can Tho City), said that Japanese companies wanted to invest in the Mekong Delta, but infrastructure in this place is not complete. The region has Can Tho International Airport but the airport does not have routes to Hong Kong, Thailand, etc. Lack of information is also a problem.
According to a survey of VCCI in 2012, quality labor in Can Tho accounted for 70 percent compared to 93.5 percent in HCM City. Labor costs in the region were also lower than the Southeastern region and HCM City.
Dr. Vo Hung Dung said: "Labor is the bottleneck in attracting FDI in the Mekong Delta. The region’s labor is abundant but the quality is still low.”
Mr. Tran Anh Tuan, Vice Chairman of Ben Tre province, said: "The biggest difficulty in attracting FDI in the province is the lack of clear land. Investors want to invest in industrial zones but the infrastructure of these places is not complete."
Advantages
Mr. Kim Do Kyong, representative of the National Agency for Promotion of Industry and Information Technology (South Korea), said: "There are many Korean investors investing in Dong Nai, Binh Duong, Ba Ria - Vung Tau, but they are not keen on the Mekong Delta, because our country produces many agricultural and aquatic products and we don’t need to import these things. However, in the future, the Mekong Delta is an important agricultural area, so we want to help Vietnam develop high-value products."
According to Mr. Motoyuki Nakamura, in 2007, his company came to Vietnam to seek investment opportunities and it selected Can Tho because of its lower labor costs compared to HCM City and the university graduates here are also active.
Dr. Vo Hung Dung said that in the long term, the Mekong Delta should focus on developing infrastructure to reduce transportation costs, increase investment and create opportunities for the development of industry and services.
"The investment in seaports is highly fragmented at present. If investing in dry docks, distribution centers in Can Tho City will save shipping fees. Goods from the ports of Ho Chi Minh City can come here and are distributed to other provinces and vice versa. This will help strengthen the position of Can Tho as the regional center," Dung said.
Director of the Japan Trade Promotion Agency – Mr. Yasuzumi Hirotaka recommended: the Mekong Delta needs to train young workforce on the spot, with cheap labor cost to provide for enterprises. This is important because many labor-intensive companies are withdrawing from China, Thailand due to wage increases.
vietnamnet
