HCMC – There has been little progress in the planned restructuring of HCMC’s economy, experts said at a conference on Tuesday.
While HCMC is an economic driving force in Vietnam, the city’s contribution to the national economy has not met expectations, said Tran Dinh Thien, head of Vietnam Institute of Economics, in a meeting to assess impacts of Vietnam’s joining WTO and HCMC’s economic restructuring.
“When I ask myself what big changes have occurred in the city in the last 20 years, it’s hard to find the answer,” Thien said.
The city economy still relies on providing foreign companies with outsourcing services, and external factors [like importing materials],” he added.
According to the HCMC Bureau of Statistics, added values in all the three sectors of service, industry and agriculture have fallen annually. The three sectors are expected to contribute 57%, 42% and 1% to the city’s economy respectively in 2015.
The service sector has experienced the fastest growth to account for 54.5% of the city’s GDP in 2010. However, a shift from manufacturing to service is not attributed to the city’s efforts, but rather the natural progress as more entrepreneurs venture into the service sector that promises higher profits.
Tran Van Bich, another economic expert, noted that manufacturing is being moved out of the city to other provinces, and the land is being taken up by service providers.
In addition, non-State and foreign invested companies have made strong contributions to the city’s economy. Foreign invested enterprises accounted for 23.3% of the city’s GDP in 2009, up from 20.6% in 2006.
For real progress to be made, experts suggested HCMC needs breakthrough changes in red tape, infrastructure and skilled workforce numbers. The big challenge though is administrative reform.
“Choosing key sectors has been important for the city, but it’s vital to undertake institutional changes,” said Thien .
“HCMC should have a larger vision as it develops into a modern mega city, than just trying to upgrade its current situation. I can’t imagine what the city will look like in ten years,” Thien added.
Developing infrastructure with natural conditions and economic targets in mind and training a highly skilled workforce for the transferring of high technology are also needed for the city’s sustainable development, he said.
