Build only what you need

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Vietnam should only build industrial parks when and where they're needed, Le Quoc Dung, vice chairman of the National Assembly's Economic Committee, tells Thanh Nien Weekly in an interview.

Thanh Nien Weekly: Why are so many industrial parks not full?

Le Quoc Dung: Firstly, some localities planned to develop too many industrial parks. Many localities have easily been allowed to use agricultural land to develop industrial parks.

Secondly, plans to build industrial parks are often not related to the localities' investment attraction plans.

Thirdly, industrial park development in some localities is unreasonable. If they built industrial parks under their plans, and do it only when there is demand, there would be no problem. However, many localities that want rapid growth have cleared massive amounts of land to build industrial parks. They have not balanced the demand for industrial parks with the demand for foreign investment attraction. Companies' investment capabilities are limited while we open too many industrial parks.

Many firms occupy a lot of room in industrial parks, but do not use it up. Only 50 percent of industrial parks nationwide are fully occupied. Hundreds of hectares of land in many other industrial parks in provinces such as Bac Giang, Ha Nam and Hai Duong have not been used for years.

So, it's because localities are too interested in industrialization and modernization?

Many localities have big, hasty, unbalanced plans. They think that if industrial parks open, companies will invest in them. However, companies' investment is limited. The country now houses some 500,000 companies, but only 60 percent are really involved in any real operations, the others exist in name only. This is unbalanced and unreasonable.

Many localities don't have enough money to build infrastructure such as roads, electricity infrastructure, and water and environmental pollution treatment.

Should we stop licensing localities to build industrial parks?

I am worried that the government and localities still have big plans for industrial park construction between 2011 and 2020. For example, in 2010, Vietnam housed some 83 hectares of industrial parks and other small-scaled areas where manufacturers gather. However, there is a plan, which has not yet been approved by the National Assembly, on raising the acreage to 250,000-270,000 hectares.

The acreage is too big, and we need to carefully consider the plan, as only 52-53 percent of land in our current industrial parks are occupied.

If everything goes well, our current industrial parks will be fully occupied by 2015. Thus, any new industrial parks won't be occupied (until after that).

Vietnam has a limited amount of land, so we have to use land economically. Using agricultural land to build industrial parks is wasteful as industrial parks that aren't full are economically ineffective.

Who should take responsibility for this situation?

We have to assess the responsibility from local to central (governments). For example, Ha Nam or some other provinces that have large unoccupied industrial parks should reconsider its construction management.

Could you suggest a way to effectively change the situation?

We should build plans for periods of three to five years, and construct infrastructure based on companies' demands. People can't accept unused land and infrastructure. The government and the private sector should find ways to deal with the issue.

With a high population density and limited agricultural land, Vietnam should adjust its industrial park construction plans from now. Now, Hung Yen Province has no more land left on which to build industrial parks. We should use land more economically, or it will be very difficult to find land to serve the country's development in the future.


Pham Van Liem, deputy head of the Industry Policy Research Institute under the Ministry of Industry and Trade, said localities have roadmaps of industrial parks construction so that they can plan land use and long-term investment in industrial parks.

There will be no problems if the plans are strictly implemented, he said.

The prime minister has decreed that localities can build more industrial parks if 60 percent of their existing ones are fully occupied.

However, the occupation ratio at industrial parks now is still low, because the number of industrial parks with developed infrastructure is small, Liem said.

Industrial parks can lure investors only after their infrastructure is built. In the current context, it is very difficult for firms to pour their investment in industrial park construction and negotiate with local residents to clear land for infrastructure development.

Localities being allowed to build industrial parks en masse and the land left lying unused later has created the current flawed management system, said Liem.

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