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  Policy & Strategy

Direction for economic development in Viet Nam's regions

Prime Minister Phan Van Khai has signed decisions on the direction for economic development in all the three parts of the country, the north, the centre and the south, till 2010 and a vision to 2020.

Northern Viet Nam is assigned to contribute between 23 and 24 percent of the gross domestic product (GDP) by 2010 up from the 2005 target of 21 percent. The rate is expected to increase up to 29 percent by 2020. The region is also said to increase its tax collection to 26 percent of the State budget revenue by 2010 from 23 percent in 2005. The figure is to rise to 29 percent by 2020.

Export targets are also set at 1,200 USD per head a year by 2010 and 9,200 USD by 2020 against just 447 USD in 2005.

Along with the tempo of technological upgrade at 20-25 percent a year, the unemployment is set to decrease to 6.5 percent by 2010 and continue to be under control at 4.0 percent in the following years.

The poverty rate is expected to go down to 1.5 percent by 2010 and under 0.5 percent by 2020, while the population growth rate is expected to drop 1 percent and under 0.8 percent, respectively.

The Ministry of Industry lists high-tech industries as top investment priorities, consisting of software, information technology equipment, automation, robots, new materials, high-grade steel, and shipbuilding.

Supportive industries such as vehicle parts, electric and electronic appliances, high-quality sea eco-tourism, and aquaculture in combination with seafood specialties processing are also placed high in the list of investment for their strong competitiveness.

Human resources development also plays a key role in the region's economic policy and a series of high-quality vocational training projects including a high-skilled vocational training centre in Vinh Phuc province and a high-quality vocational training centre for the whole region will be built. The Ministry of Industry is also considering to build a high-quality polytechnic practising university in Hung Yen province.

Traffic systems will be greatly improved with the construction of expressways such as the Ha Noi-Hai Phong link, railways from Ha Noi to coal mines and the World Heritage site in Quang Ninh province, inner city Metros and railway systems for Ha Noi as well as a deep-water port in the northern port city of Hai Phong.

For the southern key economic region, the major targets are 1.2-fold and 1.1-fold increases in GDP over the country's annual average GDP growth in the 2006-2010 and 2011-2020 periods respectively. The region is also set to raise its contribution to the country's GDP from 36 percent at present to 40-41 percent by 2010 and 43-44 percent by 2020.

The other targets are to increase annual export value per capita from 1,493 USD in 2005 to 3,620 USD by 2010 and 22,310 USD by 2020; to reach an average speed of technology renewal of 20-25 percent, with a proportion of trained workers of over 50 percent by 2010; to set up high quality production and social service centres meeting international standards; and to maintain the region's population at 15-16 million people.

In addition, the region's new tasks include building a suburb complex in west and northwestern areas of Ho Chi Minh City bordering Long An and Tay Ninh provinces; developing a high quality training centre in Binh Duong province, healthcare services and skilful vocational training centres in Ba Ria-Vung Tau province and intermediate warehouses in Dong Nai province; building expressways linking Ho Chi Minh City with Vung Tau, Trung Luong and Tay Ninh; and preparing for the construction of Long Thanh airport.

The central region's average annual GDP growth is set to reach 1.2 times the country's GDP growth in the 2006-2010 period and 1.25 times in the following ten years. The proportion it contributes to the country's GDP is expected to rise from 5 percent currently to around 5.5 percent in 2010 and 6.5 percent in 2020 and its contribution to the State budget revenue will be increased from 4.6 percent in 2005 to 6 percent in 2010 and 7 percent in 2020.

The average annual per-capita export value is expected to rise from 149 USD in 2005 to 375 USD in 2010 and 2,530 USD in 2020, and the urbanisation rate is set at 40 percent in 2010. The central region is expected to reduce the unemployment rate to 5 percent and to reduce this to 4 percent in 2020. It is striving to generate between 60,000 and 70,000 new jobs each year and to reduce the number of poor households from 15.5 percent in 2005 to below 8.8 percent in 2010 and around 2 percent in 2020.

In addition, the central region is asked to speed up the pace of building the Chu Lai open economic zone in Quang Nam province, the Dung Quat economic zone in Quang Ngai province and the Chan May economic and trade encouragement zone in Thua Thien-Hue province as well as planning the Nhon Hoi economic zone in Binh Dinh province. It has to enhance the role of the international services and trade centres throughout the central and central highlands region and form tourism centres in Hue, Da Nang and Quy Nhon city and an interdisciplinary training centre in Hue city.

Furthermore, the whole region will try to complete the construction of the tunnel of Hai Van Pass, and the western bypass through Hue city, the Da Nang-Chu Lai-Quang Ngai and Da Nang-Hue-Quang Tri expressways before 2007. Other major infrastructural projects connecting the central and central highlands regions with neighbouring areas will also be completed.

Northern Viet Nam comprises eight provinces and cities, namely Ha Noi and Hai Phong, Quang Ninh, Hai Duong, Hung Yen, Ha Tay, Vinh Phuc and Bac Ninh provinces and southern Viet Nam includes HCM City, and Dong Nai, Ba Ria-Vung Tau, Binh Duong, Tay Ninh, Binh Phuoc, and Long An provinces. Meanwhile, Da Nang, Thua Thien-Hue, Quang Nam, Quang Ngai and Binh Dinh provinces are in the centre of the country.-

Ministry of Finance - (25/08/2004)

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