Vietpartner - Vietnamese Industrial Zone Reviews

Vietnam has undergone more than 20 years of renovation and during this period a number of industrial zones (IZs) and major economic zones have been established in the country. From a general point of view, the development of IZs and major economic zones has contributed significantly to the growth of the Vietnamese economy.

However, many problems still exist related to the effectiveness of economic development, the competitiveness of companies, environmental protection, employment and post-industrialization problems.

Statistics show that there are now in Vietnam 154 IZs and export processing zones (EPZs) with total area of nearly 33,000ha, which are located in 55 localities. In addition, there are 10 economic zones with total area of approximately 550,000ha, and two high-tech zones (Hoa Lac and Ho Chi Minh City). However, only IZs and EPZs in localities in the southeastern region such as Ho Chi Minh City, Dong Nai, Binh Duong, and Ba Ria - Vung Tau, and a few IZs and EPZs in the north (Thang Long IZ is an example) have successfully attracted investment. Most other IZs and EPZs in the north, the central region and the Cuu Long (Mekong) Delta remain unattractive to investors.

Experts say that the development of IZs and EPZs in some localities of Vietnam is still unplanned and unfocused. To realize the objective for Vietnam to become an industrialized country by 2020, the Communist Party has indicated clearly that investment must be focused on industrial and technological development. Because the starting point of industrial development in Vietnam is lower than that in many other regional countries, Vietnam must prepare well for future development in order not to lag behind them. Of the existing IZs and EPZs in Vietnam, only some have attracted large-scale investment projects in the field of high technology. Other IZs and EPZs have attracted mostly small-scale investment projects.

In developed countries, IZs and EPZs are being developed according to plans that were made for each particular region. In each region, IZs and EPZs focus on the development of one industrial area based on the utilization of the advantages of that region. IZ and EPZ development goes along with environmental protection. Therefore in those countries no IZ or EPZ is allowed to be developed in places where the land is fertile and suitable for agricultural production. IZs and EPZs are allowed to be developed only in places where agricultural production cannot be lucrative. But in Vietnam, the situation is opposite. Many fields with fertile soil have been cleared to build IZs and EPZs while many areas where the soil is impoverished that cannot be used for agricultural production purposes are still being left fallow. As a consequence, the development of IZs and EPZs in Vietnam follows no master plan.

Thousands of hectares of agricultural land in Vietnam have been used for industrial development. As a result of this, a large number of Vietnamese farmers have lost their jobs. Statistics show that more than 500,000ha of agricultural land in Vietnam have been turned into industrial land, making three farmers from every two households unemployed. Data from the Ministry of Agriculture and Rural Development show that over the past five years the change of the use of agricultural land has affected the lives of about 628,000 farmer households with more than 950,000 workers and 2.5 million people. Thus, the use of agricultural land for industrial purposes has taken away the jobs of many farmers and made their lives worse.

For IZs and EPZs to develop effectively as a driving force for the growth of the entire national economy, it is necessary to survey the existing situation of land use and classify land. The classification of land aims at identifying which kind of land is suitable to agricultural development and which kind of land can be used for industrial purposes. It is also necessary to make careful analyses before deciding to turn any area of agricultural land into industrial land. In addition, industrial development must go along with environmental protection to ensure that it is harmless to human health. Local people must be trained so that they can be employed to work in IZs and EPZs.

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