Danang encounters difficulty in attracting investment
Danang encounters difficulty in attracting investment
Despite breaking records in investment attraction last year, at VND8.830 trillion in domestic investment and US$691 million in foreign direct investment (FDI), Danang has also experienced hurdles in investment attraction.
Only a few large-scale projects were recorded. Most of the fresh investment projects approved were registered at the beginning of the year.
The central city attracted 132 fresh FDI projects with a combined registered capital of US$438 million plus US$117.4 million from 16 operational projects that had increased their capital. In addition, foreign investors bought shares from companies with a combined US$135.33 million. These figures in 2018 were US$286 million, US$21 million and US$56 million, respectively.
Eight FDI projects worth US$469.387 million in total were granted investment certificates at the Spring Seminar held on March 1, 2019, in Danang City. Only two of them injected more than US$100 million into the city: the Sunshine aerospace component manufacturing project run by Universal Alloy Corporation Asia Pte. Ltd (UAC) and the Xuan Thieu tourist complex run by Mikazuki Group.
The remaining projects registered capital of US$6 million to US$50 million.
Moreover, at the seminar, the Danang People's Committee allowed 11 projects with total investment capital of over US$3 billion to conduct investment studies. However, there has been no further development.
Director of the Danang Investment Promotion Agency (IPA Danang) Huynh Lien Phuong admitted that investment attraction to the city has encountered many difficulties. Most of the investment projects were small, mainly in the service sector. The number of projects that invested in advanced technology was modest.
In addition, promoting large projects in the health, education, trade, real estate, logistics and transportation industries has long experienced problems. Some projects located outside industrial and hi-tech parks have not been included in the master zoning plan, according to Phuong. Complicated land lease procedures, slow site clearance and compensation and vague policies are other obstacles, she added.
Phuong pointed out that the IPA Danang has proposed some solutions to the city leaders, including organizing more investment promotion trips to major markets and focusing on key investment projects to quickly grant investment certificates in 2020.
Pham Truong Son, director of Danang High-tech Park and Industrial Zones Authority, said that this year the body would expand the Danang High-tech Park. Industrial zones supporting the park will be funded to best serve investors. Danang High-tech Park will prioritize large investment projects with capital of US$100 million or more.
