FDI inflows into Vietnam’s Mekong Delta set to see bright outlook

Content image - Phnom Penh Post
Garment products are made by workers of Tainan Enterprises Vietnam Co in the Mekong Delta province of Long An. VIETNAM NEWS AGENCY

Vietnam's Cuu Long (Mekong) Delta region, which covers 13 cities and provinces, has many advantages for attracting investment, especially foreign direct investment (FDI), thanks to its huge potential for agricultural production and renewable energy development.

Nhadautu cited Japanese Brain Works Group CEO Noboru Kondo as saying that although his group had invested in Vietnam for a long time, he had only known about the Mekong Delta city of Can Tho for about five years.

 

A few years ago, many Japanese investors only knew about Ho Chi Minh City and some southern provinces such as Long An and Tien Giang instead of the Mekong Delta, due to a lack of information and travel difficulties, so very few wanted to invest in this region, he said.

However, this situation had changed thanks to the region’s improved infrastructure system and this was the best time for Japanese businesses to invest in the area, he told the online newspaper.

In addition to upgraded transport infrastructure, localities in the Mekong Delta such as Can Tho, Vinh Long and Hau Giang have also developed dozens of large-scale industrial parks to provide investors, especially from overseas, with adequate clean land.

Last year the region attracted a total foreign investment of more than $5.64 billion with the largest amount coming to the energy sector, according to the Foreign Investment Agency.

Long An province ranked second among 59 localities with $3.84 billion or equivalent to 12.3 per cent of the nation’s total investment, mainly thanks to the Singapore-invested Long An I and II liquefied natural gas (LNG) power plant project worth $3.1 billion, to transmit, distribute and produce electricity in the province.

Meanwhile, Can Tho city came eighth with over $1.32 billion thanks to the O Mon II thermal power plant being invested by Japanese investors to create a thermal power factory for electricity supply for the regional and national power system.

 

Nguyen Phuong Lam, director of the Vietnam Chamber of Commerce and Industry’s branch in Can Tho, outlined eight reasons that investors should invest in the Mekong Delta: favourable business and investment environment, a rich material area, an abundant and low-cost labour force, attractive local consumption, and sufficient clean land for investors.

Low rental cost and a huge room for many new investment fields such as hi-tech agriculture, information and communications technology (ICT), logistics, wind power, solar power, tourism real estate, and high-tech engineering projects to cope with climate change were also included.

During a recent meeting with the Mekong Delta Coordinating Council for 2021-2025, Deputy Prime Minister Le Van Thanh said the government had given special priority to several transport projects in the region, including highways and national routes, alongside maritime and aviation.

“If done well, by 2025 we will have 300km of highways in the region, which shows the government’s commitment on this matter,” said the minister.

The Ministry of Agriculture and Rural Development is also developing plans with each province to build major, quality agricultural production areas for domestic consumption and export, alongside other freshwater reservoir projects.

“Transport infrastructure plays an incredibly important role in the region’s development,” Thanh said. “If we want to develop the Mekong Delta, the number one priority for localities is the development of transport infrastructure. This will help enhance connections and utilise the strengths of the regions.”

As of last year, the Mekong Delta was home to 1,839 valid foreign-invested projects capitalised at over $30 billion, accounting for about 7.5 per cent of total foreign investment registered in the country.

VIET NAM NEWS/ASIA NEWS NETWORK