Building a financial hub for Vietnam
Building a financial hub for Vietnam
Ho Chi Minh City People’s Committee is resuming its mega-plan to turn the city into an international financial hub after last year’s disbandment of the $900 million Berjaya Vietnam Financial Centre.
Nguyen Thien Nhan, Secretary of Ho Chi Minh City Party Committee told participants at the workshop, themed on turning the city into a regional financial hub, that the city wants to develop itself into an international financial centre (IFC). “This IFC will not only benefit the city, but also the whole country,” Nhan said.
He also requested that local authorities finish the detailed plan by October 2019, with the first bidding packages to kick-off in the middle of next year. “We are behind the rest of the world in setting up financial centres like this, but I do believe that with Vietnam’s brainpower we can seize all opportunities,” Nhan said.
He also suggested key factors to develop Ho Chi Minh City into a global and regional financial hub, including improving administrative procedures, creating an enticing investment environment, completing the infrastructure system, speeding up plans to fight floods, and improving startup initiatives.
Ho Chi Minh City is now developing its four core fields of education, healthcare, environment, and fintech application to reach international standards.
“All of these factors will provide the conditions for the implementation of the IFC plan,” Nhan stressed.
According to economist Vu Thanh Tu Anh from Fulbright University, which was assigned by Ho Chi Minh City People’s Committee to set up the plan, any financial centre must include urban space and a well-oiled financial system, rather than simply housing.
“An IFC must support and implement cross-border financial transactions meeting international standards,” Anh explained. “Specifically, a financial centre is home for leading financial companies, where businessmen look for new financial services and are served with diversified and relevant products.”
However, he said that the shape of Ho Chi Minh City’s financial centre has not been clearly defined yet because it is still being studied by the competent bodies, and city authorities must find a breakthrough in technology application.
He added that a breakthrough in fintech is of the utmost importance to keep up with global trends. “With the available human resources, we are confident about creating an IFC. However, we need support from the government in legal procedures and regulations to reach international standards,” Anh said.
Over 10 years ago, Malaysia’s Berjaya Land set up the so-called Berjaya Vietnam Financial Centre (BVFC), designed as “a world-class integrated mixed commercial development” with professional facilities for financial business. However, Berjaya Land faced multiple hiccups which hindered the project from ever being executed. In 2018, the project was transferred to two domestic companies who now plan to develop it into a mixed-use project.
According to Nguyen Thanh Phong, Chairman of Ho Chi Minh City People’s Committee, although the city wants to develop into an IFC, the lack of policies and qualified human resources are key challenges for the city’s IFC plan.
He said that despite having many advantages and huge potential to become a regional and global financial hub, the city still has not drawn up a clear plan, but with the contributions from international and domestic experts, the initiative could be sped up in the near future.
Currently the city’s financial sector grows at an average 8.8 per cent per year, mobilising around VND460 trillion ($20 billion) for socio-economic development.
In related events, last year Ho Chi Minh City Department of Planning and Investment revealed that it was soliciting investment to build a VND4.9 trillion ($213.04 million) financial, banking, and trade centre in the Thu Thiem New Urban Area. The complex will be built on nearly 14,500 square metres by 2021. The project will require two land parcels in Thu Thiem (in District 2, east of the Saigon River) for two 20-50-storey towers. Compensation for the land has been allocated.
The project is one of 210 projects that Ho Chi Minh City prioritised for investment last year. The department said many investors have expressed interest, both domestically and from overseas.
