Visualising a new global finance hub
Visualising a new global finance hub
Domestic and international experts and investors are discussing an ambitious plan to build an international financial centre in Ho Chi Minh City. Different concepts and methods have been proposed, however, a possible model for this centre is still vague and needs more time to be finalised before actual construction begins.
Building Ho Chi Minh City into a regional and international financial centre has been an ambitious idea for many years, supported by many domestic and international economic experts.
Chairman of Ho Chi Minh City People’s Committee Phan Van Mai said that the central government has agreed to include in the 13th Party Congress a resolution to build Ho Chi Minh City into an international financial centre.
“This is an important policy to help the city implement its aims. In 2021, the city has carried out preparations such as establishing a steering committee, a working group to develop a project, and inviting a consulting unit to initially study the model and mechanism of financial markets,” Mai said.
“However, the pandemic has slowed down the process and now is the right time to accelerate research, complete the project, and submit it to the competent authorities to develop the financial centre project,” he added.
Chairman of Ho Chi Minh City Finance and Investment State-owned Company (HFIC) Nguyen Ngoc Hoa said that the city has a new approach in two dimensions.
The first is from the policymakers to see what needs to be done to build such a centre. With this approach, the city has assigned HFIC to work with Fulbright University to jointly define the foundation, principles, composition and necessity of building an international financial centre. The second dimension is from the demand approach, where investors can express their expectations on the mechanism and policies of the centre, Hoa said.
“We combine both the needs of this centre with the wishes of investors to come up with the best proposal,” Hoa said.
He added that in this project, Ho Chi Minh City clearly defines the goal of becoming a hub to attract corporate, private, and global capital flows. However, the most important factor is how to spend it effectively.
The city has assigned HFIC to collect expert opinions to summarise and submit to the government and report to the Party and state leaders.
An MoU was signed on February 8 between Ho Chi Minh City People’s Committee and Import-Export Pan Pacific Group on researching and preparing a project to build an international financial centre in the southern region. According to the MoU, the group will sponsor the study plan of establishing the centre in Ho Chi Minh City, connecting with foreign investors and funds as well as hiring American enterprises to provide consultancy on the plan completion. It guarantees to hand over the plan to Ho Chi Minh City within 60 days.
According to Johnathan Hanh Nguyen, chairman of Import-Export Pan Pacific Group, foreign investors are very interested in building a financial centre in Ho Chi Minh City.
Notably, US investors have committed to immediately pour $10 billion when the competent authority approves the construction of the financial centre. Around $4 billion of this is expected to be used for a similar venture in Danang and the rest for Ho Chi Minh City.
According to Nguyen, before the shift of financial institutions in the region and the world, Southeast Asian countries are fiercely racing to invite investors. For Vietnam to seize this opportunity, domestic policy needs a breakthrough and more incentives than the current legal framework for establishing financial centres.
At a February 17 seminar on creating a breakthrough for economic development in Ho Chi Minh City and beyond, Vo Tri Thanh, director of the Institute for Branding and Competition Strategy, outlined the key points to building an international financial centre.
Thanh said it is necessary to have an outstanding breakthrough institution with high international competitiveness that is fresh and not outdated. Chosen investors must be high-qualified in different aspects, not only in their finance. The project must also be established in combination with overseas and domestic aspects, with thoughts on world finance, economy, and currency but attached to a strict domestic legal framework.
Meanwhile, economist Can Van Luc stressed the necessity of imagining what this centre will be like first, saying whether it could be a high-rise building like Bitexco Financial Tower or a Wall Street of New York, or could it be combined with entertainment facilities such as casinos and tourism complexes.
Apart from that, Luc added that the financial world is changing very quickly as digital transactions and cryptocurrencies will be a more dominant monetary trend moving forward.
“Vietnam should itself decide its position in such a changing world to have a trendy financial centre that keeps up with world trends,” Luc said.
