Vietnam shouldn’t build three special economic zones at once, test one first instead

‘If mistakes are made, it would be difficult to undo them.’

Vietnam should build-test one special economic zone (SEZ) first instead of developing all three at once, a National Assembly conference heard on Wednesday.
“If we develop all three zones at once and mistakes are made, it would be difficult to undo them,” said Truong Trong Nghia, a delegate from Ho Chi Minh City.
He also had doubts over how the money spent to develop the SEZs would be used, and how it would affect people’s lives.
“According to the development plan, the total cost to develop the SEZs would be VND1.5 trillion ($66 billion). If that money is spent on providing incentives for land and sea lease, wouldn’t many families have to relocate to make room for new leases? And this would be in the interest of investors,” Nghia said.
“We delegates expect that these SEZs live up to the amount of money spent on them,” he concluded.
In a previous session on Tuesday, Nghia also said that investing in these SEZs is a risky gamble for Vietnam and requires careful management and resource distribution, while noting that many countries have failed in developing their own zones.
“An SEZ’s success depends on proper administration and management. But money, politics and interest groups can skew the original objectives of the SEZ and cause it to fail,” he said.
But it’s tax incentives that have been at the center of SEZ criticism, with economist saying too generous incentives may breed unhealthy competition. What’s more important to attract investors, they said, are institutional support that would warrant an investment friendly business environment.
In response, the National Assembly is now considering a proposal to reduce tax incentives for casinos and other gaming ventures in SEZs.
Vietnam is planning to establish three SEZs, which are Van Don in northern Quang Ninh Province, Bac Van Phong in central Khanh Hoa Province, and Phu Quoc in the southern Kien Giang Province.
The Ministry of Planning and Investment estimated that the SEZs will be able to bring a total of $9.5 billion each year to the state coffers from tax payments and land related fees. In 2030, the total number of jobs created in the three areas is estimated to be over 760,000, with income per capita up to $13,000, 5.4 times the current level.
By Vo Hai, Hoai Thu
Source: VnExpress