Southern key economic region drives Vietnam’s economic growth

(VOVWORLD) - The Southern key economic region acts as a development axis of the southern region and of the entire country. To make the region grow sustainably, a new mechanism is needed.
Southern key economic region drives Vietnam’s economic growth - ảnh 1Dr. Tran Du Lich, a member of the Prime Minister's economic advisory group (Photo: VNA)

The Southern key economic region is considered a growth driver of the national economy.

Besides HCMC, the region covers Binh Phuoc, Tay Ninh, Binh Duong, Dong Nai, Ba Ria-Vung Tau, Long An, and Tien Giang provinces.

It covers one tenth of Vietnam’s total area and contains 22% of Vietnam’s total population.

Its gross regional domestic product (GRDP) is more than 35% of Vietnam’s GDP, and it export accounts for more than 30% of Vietnam’s exports. It has contributed 46% of Vietnam’s budget revenues since 2005.  

Although the region’s economic indicators are high compared to those of other regions, its growth rate is slowing down.

From 2011 to 2015, the region's economy grew 6.87%, but only 5.5% from 2016 to 2020 against a target of 9-10%. The region's budget contribution was once above 54%.

Dr. Tran Du Lich, a member of the Prime Minister's economic advisory group, said, “What we’re worried most about is that if the region no longer acts as a driving force, it’ll be a loss for the nation and not just the region. We need to remember that developing and exploiting regional resources is for the sake of the whole country.”

The region clearly experienced a slowdown from 2011 to 2017 with labor productivity increasing only 5% per year. During that period the northern key economic zone grew 8.54% per year.

According to economists, the number of businesses in the region has increased 600%, and transportation volume has increased 500%, but there are still not enough highways. Planned ring roads still haven’t been built. This has made it difficult for the region’s economy to match its potential.

Associate Professor Dr. Tran Hoang Ngan, Director of the Ho Chi Minh City Development and Research Institute, said, “The regional association is not strong enough. The laws do not sufficiently define the rights and responsibilities of each locality. Linkage is primarily between central and local governments and there are not enough links between localities. Coordination in carrying out regional planning is not tight yet.”

To make regional links more effective and turn the region into a growth driver, experts say, will require more political determination, consensus, and coordination at all levels to produce infrastructure, human resources, and capital.

Associate Professor Dr. Tran Dinh Thien, former Director of the Vietnam Economic Institute, says regional institutions should be powerful enough to outline, implement, adjust, and supervise the implementation of regional planning and have the right to select and prioritize projects for regional development.

“We need to give more resources and responsibility for development to the provinces. Once the provinces can shoulder their regional responsibilities, the role of the region can increase,” said Thien.

Echoing the need to change the mindset, Nguyen Van Loi, Secretary of the Binh Duong provincial Party Committee, said the southeast region needs to design an urban industrial belt running from Long An to Tay Ninh, Binh Duong, Binh Phuoc, Dong Nai, and Ba Ria-Vung Tau in the coming 10 to 15 years.

According to Loi, “If a locality can fully tap its own strengths, it won’t need resources from the central government. Once the provinces start working together, they can connect with each other and turn into a new growth driver.”