By the end of 2005, Viet Nam had 131 IPs and EPZs, covering nearly 27,000 hectares in 47 provinces and cities across the country. The southern provinces (including HCM City, Binh Duong, Dong Nai and Ba Ria-Vung Tau), the central coastal provinces and the Northern Delta had 96 IPs and EPZs, accounting for 73% of the country's IPs.

Foreign enterprises have invested in 2,120 FDI projects in these IPs and EPZs, with total registered capital of US$16,843 million while domestic companies have registered in 2,367 projects, capitalized at VND113 trillion (US$7 billion).

"These IPs and EPZs have mobilized major capital from domestic and overseas sources for national industrialization and modernization," said Deputy Minister of Planning and Investment Nguyen Bich Dat.

IPs and EPZs have helped localities re-structure their economy and enhance the competitiveness of Vietnamese products, said Dat. During 2001-05, total industrial production of IP enterprises in the country amounted to $44.5 billion, five times higher than the 1996-2000 period’s figure. The IP enterprises attained an annual growth rate of 32% for their industrial production compared to the national average of 16 %.

These IPs and EPZs have also helped develop modern infrastructure which contributed significantly to the country's infrastructure systems. By the end of 2005, the Government had licensed 19 FDI projects valued at over US$1 billion, and 112 projects invested by local companies with total investment of VND33 trillion ($2 billion) for developing infrastructure at IPs and EPZ.

More jobs have been generated from these IPs and EPZs, thus helping enhance people’s cultural and intellectual standards and improve social welfare. Some 865,000 people are working at these IP enterprises while another 1.5 million people are working for IPs-related sectors.

Most industrial production lines are located in IPs and EPZs so they enjoy more favorable conditions to treat industrial waste discharged by these enterprises. Dat said IPs and EPZs have also made it easier for the Government to protect the environment and tackle urban pollution issues by relocating those enterprises which are causing pollution in urban areas.

In addition to promoting foreign trade and investment, these zones have facilitated domestic companies in working with their counterparts in EPZs and IPs to explore export markets, offer competitive prices and reduce management costs. These efforts have prompted domestic enterprises to further invest in technology renovation, seek new markets, raise competitiveness of their products, and build recognized trademarks.

The development of IPs and EPZs has exposed weaknesses and challenges. Phuc said IPs were concentrated in areas with favorable conditions while ignoring remote areas, especially northeastern provinces. Dat said as these IPs and EPZs were zoned and developed by provincial authorities, they are not well matched with the master development plans of the country.

Secondly, delays in compensation and site clearance have resulted in slow development and made investment in some IPs unattractive, as exemplified in Dai Tu, Nam Thang Long, and Sai Dong A (in Ha Noi), Dinh Vu, Hai Phong 96 (in Hai Phong); and Bac Phu Cat (in Ha Tay).

Thirdly, there are not enough local skilled workers for IPs and EPZs. Meanwhile, Phuc said that, legal interests of workers were not fully protected in some IP enterprises. Salaries, accommodation and lack of social welfare for IP workers posed big concerns to employers and Vietnamese authorities. Of around 130 IPs and EPZs) in Vietnam, only 7% provide accommodation for workers. With average monthly income of VND800, 000 – VND1mil (US$50-62.5), IP workers could only spare VND100, 000 ($6.25) for housing.

According to the MPI, Vietnam plans to raise the industrial production of IPs and EPZs from the current 28% to 39% of the country's industrial production by 2010.

The Government will encourage investment to ensure that all the unoccupied land in existing IPs and EPZs will be leased by tenants by 2010.

Dat said the Government will consider plans to expand existing IPs and establish new IPs by an additional 50,000 hectares in the next five years.

The Government will issue new policies and incentives to attract 6,500 projects with total investment of $38 billion (from local and overseas investors) in IPs and EPZs by 2015.

By 2020, Vietnam strives for fundamentally completing the network of IPs and EPZs nationwide. Comparing to EZs in other regional countries, these EZs proved to be a model of high competitiveness. Reviewing the activities of eight EZs, four have attracted investment. They include Chu Lai Open Economic Zone (79 projects capitalized at US$774 million), Dzung Quat Economic Zone (94 projects with US$3.4 billion) and Chan May Lang Co (25 projects with US$280 million).

According to the Ministry of Planning and Investment, in the 2006-2010 period, Vietnam needs VND16,000-24,000 billion to develop infrastructure for the eight economic zones (including Nghi Son, Vung Song, Chan May-Lang Co, Chu Lai, Dung Quat, Nhon Hoi, Van Phong and Phu Quoc). As state budget resources are stretched to meet the development demand of EZs, it is necessary to mobilize extra resources.

(Compiled from July 15^th-17^th Vietnam Economic Times, Investment Review and http://www.bvom.com/, www.itpc.hochiminhcity.gov.vn/.)