The Hanoitimes - Hanoi economic performance in 2016 was regarded as positive. Most of socio-economic indicators, economic growth, investment attractions, price control and budget revenue also increased year on year. The capital city has become a destination for investment. It is expected to continue with the success of last year to make 2017 another year of successful investment attraction.
Almost all targets attained
In 2016, despite many challenges, the economy of Hanoi had earned many achievements with an 8,2% increase in the total of gross regional domestic product (GRDP), the highest in the last six years. During the first six months of 2017, with many creative solutions have been implemented, the majority of targets and indicators of Hanoi continued to increase. In particular, GRDP increased by 7,37% (an increase of 7,34% compared to the previous year). Services increased by 7,42%; construction increased by 7,55%; agriculture increased by 2,25%; the sum of export tax and product tax minus product subsidy increased by 8,42%.
Printers production at Canon Vietnam Ltd., Thang Long Industrial Complex, Hanoi
The growth rate of the total amount of sale and social services reached 7,2%. Particularly, retail sale increased by 7,1%. Export targets exceeded expected number and were higher than those of recent years. For instance, the total value of export reached 5.789 million USD, a 12,1% increase compared to other years. Meanwhile, the plan expected the increase to be from 4 to 5%. (The same period in 2015 the total value decreased by 1,2%, while in 2016 the number increased by 0,1%). The export of FDI sector increased the largest, reaching 20,8%. Tourist arrivals reached 11,85 million, a 8% increase. Particularly, the number of foreign arrivals were 2,33 million, up by 14%.
The difficulties in commercial production have been solved; the investment and business environment have been improved. In the first six months of 2016, the number of newly registered enterprises was 13.000 (16% increase) with the total registered capital of over 101.000 billion VND. The provincial competitiveness index (PCI) has been improved. Even without financial assistance for enterprises to selling products with subsidized prices, the market was still stable and there were no commodities shortage or price increase. The reason was because enterprises had prepared a good amount of stocks and retail networks. The government is working on actively investigating and monitoring the market as well as punishing any infraction. In the last 6 months, the average consumer price index (CPI) in Hanoi increased from 3,8 to 3,86% compared to the same period in 2016.
The monetary and financial activities are stable. The city’s budget revenue reached approximately 102.000 billion VND, making up 50,1% as expected and increasing by 18% compared to the same period in 2016. According to the latest report of the Ministry of Finance, Hanoi budget revenue is at the top of the nation. The loans to commercial production are guaranteed as well. The growth rate of credits is considerably good. Compared to the growth rate of capital mobilization, the credit balance is increasing at high rate. On June 30, 2017, the credit balance was approximately 1.582.000 billion, increasing by 8,15% compared to that of the period of September 31, 2016 and by 16,01% compared to that of the same period in 2016. In particular, loans to small and medium-sized enterprises reached 42%.
The management and development of the city are enhanced with many progresses. With detailed programs and realistic policies to improve securities and urban civilization, the image of Hanoi is becoming more and more modern and refined.
Efforts for investment attraction
In recent years, Hanoi has improved its investment environment significantly, to attract FDI. Despite limited budget, the City has actively implemented consistent measures to attract investment from domestic and abroad. As the result, the registered capital beside the government social investment is estimated at VND 190,922 trillion; an increase of 74.6% in comparison with the previous year. In particular, 58 projects received VND 34,177.6 trillion of investment; 24 projects in the form of PPP (Private – public partnership) VND 32,103 trillion; 269 projects financed by foreign investment with total registered capital of USD 1,053 billion (in equivalent of VND 23,166 trillion and of 55,2% compared with the previous year), disbursement reaches USD 550 million. Social investment fund is at VND 117,282 trillion, increasing 9.9%. This source is becoming critical for Hanoi’s economic development in the coming time.
In order to improve private investment and living standard while minimizing government budget spending, Hanoi is calling for investment from the private sector and PPP. Since the beginning of 2017, the Chairman of Hanoi People’s Committee has sent a clear message: Hanoi will put maximum priorities for potential investors, especially investors in fields of industries, transport, safe water, food safety and green food processed system, etc.
The last 6 months to grow 8.3% - 8.6%
Based on achievements in 2016 and the first 6 months in 2017, Hanoi will strive to achieve the growth rate in the last 6 months from 8.3% to 8.6%. At present, Hanoi contributes to nearly 20% GDP of the country, and is striving to achieve a budget revnenue growth of 5 to 7 percent over the estimation.
To achieve these objectives, to the end of 2017, Hanoi will focus on solutions such as: improving investment environment; encouraging start-ups, enterprises development; selling state-owned enterprises; speeding up implementation of investment projects; diversifying tourism development source; investing in tourism infrastructure and enhancing tourism product quality; improving tourism resorts promotion in Hanoi at critical markets; enhancing efficiency in government budget management; public order, land, resources and environment, etc.,
Along with the above mentioned tasks, Hanoi also pays attention to human resources development, IT research and application on production, social welfare and living standard of the citizens, foreign affairs, policies reforms, anti-corruption and complaint handling, etc. On the other hand, Hanoi Chairman Nguyen Duc Chung also stressed that, along with economic development; other social issues, including public order, rural infrastructure development will continue to be improved to transform Hanoi into a safe and good investment environment for investors.
According to the Minister of the Ministry of Science and Technology Chu Ngoc Anh, “Among 3 major national industries: Agriculture – Tourism – Digital Economy (digital technologies), tourism is increasingly developing. Especially, the science and technology of the Hanoi is receiving notable achievements, proving to be one of the top regions of the nation in science and technology activities, contributing greatly to the socio-economic construction and development of Hanoi in particular and of the nation in general.”
As of May 31, 2017, Hanoi has attracted nearly 26.09 billion USD with 4,085 ongoing projects, in which the disbursement rate is of 12.5 billion USD. Projects financed by 100% foreign investment are of the majority (78%), remaining are joint-venture and cooperation. Real estate has received the largest investment with 47% of the funds, whereas services and processing industry have been invested with 25% and 28% of the capital respectively.
(Nguyen Anh - Kinhtedothi.vn)