+ Regarding rural housing development : Strive to complete by 2020 the housing improvement support program for local ethnic minority households and policy households in the following regions: Northern midlands and mountainous areas, Northern coastal areas, South Central Coast, Southeast, Central Highlands and Mekong Delta;
Strive to complete the elimination of temporary housing (thatched, bamboo, reed, and leaves) in rural areas by 2020; the target of average rural housing area per capita is about 14m2 of floor space in 2010 and 18m2 of floor space in 2020.
The urbanization rate in Vietnam is forecasted to be on average 30% in 2010, about 50% in 2020 (the current urbanization rate in Hanoi is approximately 57%, forecasted to be 70% (2010) and about 85% (in 2020). On average, each year Vietnam needs to develop an additional 35 million m2 of housing to strive to reach 20m2 of housing.
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housing/person in urban areas by 2020. Thus, with the above development goals, it requires close attention and effective investment from both the Government and investors. Mobilizing all investment resources is necessary, not only attracting foreign direct investment but also creating conditions and "rolling out the red carpet" for indirect investment forms such as investment through real estate investment funds. Investment in these investment funds will attract even small investors to develop the real estate sector, which has previously been reserved for wealthy investors. This trend will certainly increase and develop strongly in the future.
Thus, from now until 2020, the requirement to develop the Vietnamese real estate sector is essential to be able to complete the great plan of the entire Party and people: by 2020, Vietnam will basically become a modern industrial country.
II. ASSESSMENT OF DIRECT INVESTMENT ATTRACTION SITUATIONKOREA INTO VIETNAM REAL ESTATE SECTOR.
Over the past twenty years, Korea's FDI attractionVietnam's real estate sector has also achieved great results.but also encountered many difficulties and problems.
1. Achievements in attracting Korean FDI into the fieldVietnam real estate sector
South Korea is Vietnam's leading strategic partner. In 2006, South KoreaThe country has surpassed major foreign investors such as the US, Japan,Singapore, Taiwan to become the country with the largest foreign investmentin Vietnam. In addition, the proportion of foreign direct investment of KoreaIn Vietnam, the real estate sector accounts for the largest amount of investment capital, more than any other sector.heavy industry or light industry that Korea invested in earlierVietnam. Korea increasingly affirms itself as Vietnam's leading partner.in terms of cooperation and economic development.
Korean FDI capital invested in Vietnam's real estate sector holds avery important role in developing this very young field in Vietnam.South. In addition to its role as a source of foreign investment affecting the sector,As presented in chapter 1, Vietnam real estate has 5 important roles:
+ Additional domestic capital
+ Increase competitiveness in the market, create a competitive real estate marketmore perfect
+Acquiring technology and management know-how
+ Create jobs, improve the quality of real estate human resources
+ Increase budget revenue
In addition to those five roles, Korean investors also contributemany other great roles, 5 more roles to mention are as follows:
+ Increase aesthetics in places where Korea invests in constructionhotels, commercial offices, resorts,... With two major projects, the project
The project is implementing investment in 5-star hotel, office area, residential area of
Keangnam Group promises to provide a magnificent, luxurious landscape.importance, high-class in the products that Keangnam provides. Keangnam declaresannounced that this project will be the pride of this group in Vietnam; or as expectedThe project to build an urban area on the banks of the Red River in West Lake is praised as a diamond.Vietnam's diamond, comparable to the famous project of the city by the Han Riverof South Korea, which investors are very successful. Every year the cityHan River welcomes millions of visitors. River City ProjectThis hip in Vietnam promises to change the face of the capital Hanoi.
+ Reduce tension in the real estate market due to lack of supply and excess demandReal estate in Vietnam: This is another very clear fact. Demand for real estate
In Vietnam, urban areas and economic exchange centers are extremely large.but supply is limited. It is this imbalance in supply and demand that causesSo there are many problems not only in the real estate sector but also in theso serious social problems. Specifically in solving the problem of
for people working, studying and working in big cities across the country.V This tension, this problem was reduced when Korean investors usedown capital, management know-how, construction experience and design brainsplanning,.. investing in Vietnam real estate sector.
+ Improve the quality of life of residents who consume productsproducts of Korean real estate companies. Korea is a country with experience in construction.build projects of international stature and qualityKorean products are recognized worldwide for their high quality. When investorsKorean investors come to Vietnam to build guest rooms for Vietnam.luxury hotel, resort, luxury commercial office in Asiamake Vietnamese people consume Korean products and serviceselegant, modern and quality products and servicesVietnamese people feel satisfied, their quality of life is improved.advanced.
+ Economic dynamism : South Korea is famous for itsDynamic Korea slogan - a dynamic economy; FDI enterprisesKorean investors in Vietnam real estate are all large, potential enterprises.economy, they have breathed new life into the thinking, dynamic , enthusiastic andprofessional working style, a large international business model.
This is like a warning bell for Vietnamese businesses, thosebusinesses are doing business on a small scale. Warning bell for businessesVietnamese industry definitely needs to be more dynamic , more agile and moreIt is necessary to have a long-term vision and long-term strategy .
+ Join the global production network
Foreign direct investment in Vietnam's real estate sector remainshelp create high quality real estate products, comparable tointernational standards. For foreign investors in general and investors in particularKorea in particular brings its own capital, technology and business know-how.to the host country,to invest in creating real estate projects according to standardsworld standards, creating real estate products that meet national standardsworld economy , contributing to bringing the production of real estate products to the market.Vietnam market participates in the network of production of real estate products
Global real estate. A visible example of the role of participating in the production network.This global export is: Foreigners who want to buy houses to live in, orGoStaying at luxury resorts, luxury hotels can think of Vietnam.Nam is one of the options because Vietnam also has houses, areasResort, hotel of international stature, international standards.
The role of Korean FDI in Vietnam's real estate sector is also reflected inmany other aspects and sides. Each person will probably recognize their own roles.The important role of Korean FDI in Vietnam depends on eachEach person's perspective, but one thing is certainly hard to deny :The role of Korea is increasingly important in economic development.
of Vietnam in general and real estate development in Vietnam in particular. How toThe relationship between the two countries is increasingly strong and developing deeply on the principle ofIs the principle of win-win cooperation long- term ? To answer the questionThis question simply addresses the contradictions and difficulties raised inattracting Korean FDI capital and effectively using this capital.2 Difficulties that Korean investors encounter when investing inVietnam real estate sector
2.1 Group of difficulties in Legal Policy
* Complicated administrative procedures, lack of professionalism
Preparation for investment in a real estate project in Vietnam takes 2-3 years.
years. Meanwhile, market transparency is not high, most projects
Real estate still has to follow the mechanism of asking - giving, adjusting planning. Next is the situation.underground transactions, real estate speculation, virtual stimulus to raise prices... cause
increased risk in real estate business.
Many administrative procedures are introduced for business enterprises.Real estate. If the project is to actually come into operation, investors must carry outCurrently completing administrative procedures, applying for licenses from the Ministry of Planning and Investment,Ministry of Construction, Ministry of Natural Resources and Environment and other relevant authoritiesextremely cumbersome and time-consuming for businesses. Meanwhile, the proceduresadministration in neighboring countries in the ASEAN bloc such as Thailand and Malaysia
minimized to save time for investors. Official timeis money, save time real estate investment businesses willSave money, increase capital turnover quickly, help businessesmore competition and increase profits. On the contrary, if it takes too longfor administrative procedures for a project to officially operate, the enterprisebusinesses will lose money, reduce profits, and seriously reduce competitiveness to attractsuction compared to other countries.
* Many problems in decentralization and institutions at the local level
One of the contents of the LawNew investment , effective fromJuly 1 , 2006, from the effective date of the Investment Law Ministry of Planning and Investmentwill not issue any investment licenses as before but completely decentralized
for localities. Management capacity and decentralization at localities are all
are facing many difficulties. Most localities are still confused about the recognitionawareness to implement programs or integrate their management activities.
Many localities have difficulty receiving FDI capital flows.
Although there are very clear regulations on examining investors' capacity,with investment projects subject to appraisal, but in reality, in many localities
method, the application is not really clear, even illegal.The emergence of additional procedures outside of regulations is a real concern for investors.
investment, especially when localities have different requirements, even
There are even cases that are inconsistent with the provisions of the Law.Investment andDecree guiding implementation. Not to mention some projects still have to wait for opinions.Consult relevant ministries and branches on the suitability with the planning, consider the fieldsconditional investment areas, leading to prolonged time for granting investment certificates, affecting
affect investors' decisions as well as investment acceptance by
local.
2.2 Difficulties in planning policies
*Land clearance faces many difficulties
Real estate businesses always encounter difficulties in their work.Land clearance. Mr. Le Hoang Chau - Vice Chairman of City Real Estate AssociationHCM believes that most businesses invest in basic construction and constructionpublic works as well as businesses investing in real estate projects from before
Up to now, the project has not been able to start construction on schedule.
Many projects have had to extend the start time just because of problems with the solution.land clearance. The current difficulty is that a small number of people do not cooperate.
with businesses in the site clearance stage, because the project is in a state ofsuspended status only because of failure to clear the land.
Land recovery by investors from land users has never been
tension as it is now. The state only compensates for large projects, andSmall projects, non-agricultural land for businesses to trade on their own
compensation to the people. This has pushed businesses into a difficult situation.
difficult. Even public works, key works
If the State still has difficulty in compensation, then self-compensation should be done.The cost of doing business must increase many times .
Site clearance work encountered many difficulties because it was also related tothe interests of many people. The relationship of interests between thestakeholders is not an easy task. This work is slow, causingProject progress was delayed, causing great losses to the business.business, such as late delivery of houses, projects not completed on schedule
The longer the time to pay bank interest, the more burden it causes not only onnot only financially for the business but also significantly affects the reputation of thebusiness with partners and customers.
* Construction of industrial parks (IPs) - Export processing zones (EPZs)
The issue of using agricultural land for the purpose of industrial park development -Export processing zones, high-tech zones... in the context of large FDI inflows, is a common story.of developing countries. However, it is worth mentioning that in VietnamNowadays, this process is happening at a very fast speed and is not regulated.plan carefully
It is easy to see that the land areas taken to develop industrial parks -Export processing zones, high-tech zones... are mainly located in areas with convenient transportation and a large population.
densely populated, good farming land. Fertile plains such as the Red River Delta(0.8 million hectares wide), the Mekong Delta (2.5 million hectares) has been divided intoIndustrial parks, export processing zones, high-tech parks, golf courses... According to experts, the causes
of the subdivision of "granaries" and their "concretization" which came from theFDI attraction movement of localities without careful preparation,
There is no specific planning. This situation leads to localities trying to"indulge" businesses, making them get wherever they want to go,while we have many other types of land that we do not choose. The incentivesThis often leads to the situation of registering investment locations on plots of land.
"first-class fields", good farming land, convenient transportation, near the areapopulation. Many agricultural experts believe that this also causes moreWaste of agricultural resources because taking just 1 hectare of land will affectAnother 2-3 hectares, irrigation works were disrupted, even destroyed.
The concretization of "first-class fields" and "rice and honey banks" is taking place.at a dizzying speed. Meanwhile, these types of soil are extremely valuable. Professor, Dr.Nguyen Lan Dung - senior expert, Institute of Microbiology and Biotechnology
(National University) used the concept of "textured soil" to refer to the type of arable land that hasmoderate particles, can hold water, hold food, hold air in the soil without being shallowOur people still call it sticky rice bank, honey field. He affirmed that to have such soil particles,It takes the continuous activity of microorganisms over thousands of years to createhumus binds soil particles together into structured soil, which is supported by microorganismsDecomposes gradually to release nutrients for plants, combined with mineral fertilizers
so that mineral fertilizers are not easily washed down to deep soil layers. It is the concrete thatThis monoculture has caused a huge waste, and in the long run has negative effects.seriously affect future generations. Besides, the waste of industrial zonesIndustry pollutes water and air, leading to major impacts that are notclean agriculture. Not to mention the land acquisition has affected
the lives of the people living there.
2.3 Internal difficulties of the real estate sector
* Land prices and office rental prices are too high