{"id":36154,"date":"2019-03-26T11:00:00","date_gmt":"2019-03-26T11:00:00","guid":{"rendered":""},"modified":"2024-06-12T12:19:46","modified_gmt":"2024-06-12T11:19:46","slug":"11154-public-criticism-pressures-vietnam-to-back-down-on-new-economic-zones","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/business\/11154-public-criticism-pressures-vietnam-to-back-down-on-new-economic-zones\/","title":{"rendered":"Public criticism pressures Vietnam to back down on new economic zones"},"content":{"rendered":"

In June 2018, public demonstrations swept through major towns in six provinces, catching the Vietnamese government off guard and pressuring it to postpone a law on Special Economic Zones (SEZs).<\/p>\n

\"\"The Vietnamese government argues that if the law is passed by the National Assembly it could spark new investment and economic reform. Nguyen Van Phuc, former head of the National Assembly\u2019s Economic Committee, told the business community<\/a> last May: \u201cInvestors highly appreciate this law as it mirrors Vietnam\u2019s radical change in the mindset of investment attraction.\u201d<\/p>\n

But the Vietnamese public fears that Chinese companies would be the main beneficiary of the new set of investor incentives, including for the first time the offer of 99-year leases.<\/p>\n

The law aims to establish three SEZs \u00ad\u2013 also the first of their kind in Vietnam \u2013 including the strategic locations Van Don, North Van Phong and Phu Quoc. Several Vietnamese intellectuals have warned that these locations could pose national security threats to the nation if they fall into the wrong hands.<\/p>\n

China is Vietnam\u2019s top trading partner although it represents only 5.8% of total foreign investment, ranking seventh and far behind Korea and Japan.<\/p>\n

Gambling on SEZs<\/strong><\/p>\n

The Vietnamese government sees new SEZs as an important driver of economic growth and development, despite questionable results from existing ones.<\/p>\n

Government advisor V\u00f5 Tr\u00ed Th\u00e0nh a senior economist at the Central Institute for Economic Management (CIEM) said<\/a>: \u201cThe purpose of developing SEZs is to create a leading edge for the country\u2019s growth in the face of a scarcity of resources, and political and social complexities.\u201d<\/p>\n

Vietnam has already established 18 coastal SEZs with up to 325 state-supported industrial parks throughout the country. However the majority of the agricultural land<\/a> taken for this industrialisation remains unused.<\/p>\n

Vietnamese academic Nguyen Minh Quang at Can Tho University, and co-founder of the Mekong Environment Forum<\/a>, has noted that the majority of these projects are riddled with poor performance and mismanagement, accompanied by severe environmental degradation and land waste.<\/p>\n

The Ministry of Finance estimates Vietnam will need US$70 billion<\/a> to develop the three new SEZs. In the case of of Phu Quoc Island, foreign investors would be expected to furnish 41% of the capital, with Vietnam providing the rest.
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