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Investment in economic development of Vientiane Capital in the period 2007-2011 and vision to 2020 - 2


INTRODUCTION


1. Urgency of the topic

In today's era, when the globalization trend is taking place strongly, the boundaries between countries are becoming less important, investors can more easily access the markets of a country. The risk of economic backwardness between countries in general and localities in the country in particular is increasingly evident, so to promote economic growth, create more jobs, contribute to economic restructuring as well as stabilize and improve the lives of ethnic people, a necessary and important condition is to have investment in economic development as well as to use investment capital most effectively for development.

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Deeply aware of this issue, the Party Committee of the Capital and the People's Committee of Vientiane Capital have proposed many solutions to attract investment in the socio-economic development of the Capital, mobilize all resources to the maximum, continue to promote industrialization and modernization, create rapid and sustainable development, strive to basically bring the Capital out of underdevelopment by 2015, significantly improve the material and spiritual life of the people, create an important premise for Vientiane to basically become a modern industrialized Capital before 2020, with an average annual economic growth rate of 12.62%. Implementing the above policy, the Capital has issued many decisions on attracting investment, investment procedures related to investment licensing, environmental impact assessment reports, investment capital settlement, business support services, organizing investment calling conferences in Vientiane and has achieved certain successes such as creating a favorable investment environment, resolving difficulties for investors. Development must be based on a sustainable perspective to ensure the effectiveness of that development has long-term effects. That requires the country as well as the Capitals and cities to be proactive, creative, and fully exploit


Investment in economic development of Vientiane Capital in the period 2007-2011 and vision to 2020 - 2

to take advantage of economic development. This process requires research and analysis for the capital and city to find out its own characteristics and advantages, thereby determining appropriate directions and solutions for economic development. Based on that theory and practice, I chose to research the topic: " Investment in economic development of Vientiane Capital in the period of 2007-2011 and vision to 2020 ". Through the topic, the theoretical and practical bases of investment development activities, economic development investment will be clarified, the strengths, weaknesses, advantages and difficulties will be analyzed to propose solutions and directions for the economic development of Vientiane Capital.

2. Overview of empirical studies on economic development in countries in the region and around the world.

The history of economic development shows that each country, depending on the different subjective and objective concepts of its leaders, has chosen different development paths: emphasizing rapid growth, emphasizing equality, social justice and comprehensive development.

- According to Marx's political economic theory, it reflects the nature of economic growth factors such as the circulation and turnover of capital, the technical structure of social reproduction. Marx mentioned the process of forming the material basis that creates the "core" for the economy to develop through stages. Cooperation and manual workshops are the process of shifting to labor specialization, contributing to increasing productivity. The industrialization process changes the production structure, which is the factor that increases labor productivity and increases the efficiency of social production, expanding the potential output of the economy. Therefore, increasing capital investment accumulation and changing the technical structure of production are the basis of growth and growth dynamics in a developing economy. (p. 118 - 119)

* In Vietnam, many researchers have written about issues related to economic development investment as follows:

- Doctoral thesis, Nguyen Phuong Bac, National Economics University, Hanoi. “ Orientation and solutions for investment in economic development of Bac Ninh province”.


Ninh ": The thesis also raised some theoretical issues on investment development in the economy of a country. The current situation of investment for economic development and the main orientation and solutions for investment for economic development in Bac Ninh, but the scope, time and level of research and evaluation of the thesis are different.

- Doctoral thesis topic: "Improving the efficiency of using investment capital for socio-economic development in the Red River Delta in the period of 2001-2010", by PhD student Tran Duc Loc, 2005. The topic proposed groups of solutions to improve the efficiency of using investment capital, deeply and relatively thoroughly researched the field of efficiency of using investment capital. Further clarifying the theoretical basis of development investment in general and how to use investment capital most appropriately. Most effective, but the author has not yet deeply researched the economic development investment of a certain region or locality;

- Doctoral thesis: Tu Quang Phuong (currently Associate Professor, PhD), Investment efficiency and solutions to improve the efficiency of investment and development of state-owned enterprises/Tu Quang Phuong, 2003. The author has clarified the general theoretical issues on the efficiency of investment and development of enterprises, pointed out the current situation of the efficiency of investment and development activities of state-owned enterprises at the time of research, the guiding viewpoints and some main solutions;

- Doctoral thesis: Nguyen Thi Thu Huong, "Improving investment promotion to develop industrial zones in Vietnam"; 2005. The thesis has raised basic theoretical issues on investment promotion to develop industrial zones. The current status of investment promotion to develop industrial zones in Vietnam in recent times. Then orient and propose some solutions to implement investment promotion to develop industrial zones in Vietnam in the coming time. The topic deeply studies investment promotion from the perspective of enterprises;

- Master's thesis: Nguyen Ngoc Tu, "Investment in economic development of Yen Bai province: current situation and solutions", 2010. The thesis raised issues about


invest in economic development and from there analyze aspects such as capital sources;

- Master's thesis: Pham Thi Mai Anh, "Statistical study of the relationship between development investment capital and Vietnam's economic growth in the period 1995 - 2001", 2003. General theory of development investment capital and economic growth. Selecting a system of statistical indicators on the relationship between development investment capital and economic growth, analyzing the relationship between development investment capital and economic growth in the period 1995 - 2001;

- Investment in economic development of Bac Ninh province - Current situation and solutions, Nguyen Trong Binh, 2008.

- Investment in economic development of Cao Bang province in the period 2001-2015: Current situation and solutions/ Hoang Thi Ngoc Hue, 2008.

- Solutions to attract investment capital for agricultural economic development in Bac Giang province until 2010/ Nguyen Van Dung, 2008

- Some solutions to increase capital mobilization for investment in Hanoi's economic development in the period 2006-2010 / Hoang Quoc Thang, 2006.

- Although the above studies have similar names, they are all researched with different content, aspects and approaches.

- In the Lao PDR alone, research on this topic is very limited and mostly conducted by competent authorities such as the Department of Planning and Investment and the Ministry of Planning and Investment, which conduct research and general research, that is, the 5-year socio-economic development master plan of the provinces and cities and the whole country in each period.

3. Research objectives

Systematize and contribute to perfecting the theory of investment in economic development, clearly defining the role of investment in economic growth and development, content, and factors affecting investment activities to apply to the specific conditions of Vientiane Capital.

Analyze the current status of economic development investment in the capital, evaluate the advantages and disadvantages, clarify the scientific and practical bases, and from there propose


Propose solutions for economic development investment in Vientiane Capital in the coming time to meet the requirements of industrialization, modernization and international integration.

4. Research object and scope

Research object: The topic focuses on researching the scientific and practical foundations in the content of economic development investment activities, economic development investment solutions in the capital Vientiane.

Scope of research: In terms of theory: Mainly deals with theoretical issues of investment and development investment, theories of investment and economic development.

In practice: Study, analyze and evaluate the current status of investment in economic development in Vientiane Capital, propose key solutions for investment in economic development in Vientiane Capital in the coming time.

Scope of space and time: The research topic is conducted within the scope of objects and investment development activities in the capital Vientiane, the data for the research focuses on the period from 2007-2011.

5. Research method:

The thesis uses research methods: dialectical materialism, combined with historical and logical methods, analysis and synthesis, statistical methods, mathematical models and systems approach.

- Historical materialism and systematic methods: The study of capital mobilization for development investment in Vientiane Capital is carried out synchronously, in association with specific circumstances, conditions and stages. Capital mobilization for development investment is considered in close connection with each other in both space and time, and is placed in the general context of the entire economy in the process of innovation and expansion of foreign relations of Vientiane Capital.

- Statistical method: The thesis uses appropriate statistical data.


suitable for analyzing the process of capital mobilization for development investment in Vientiane Capital.

- Comparison and contrast method: Mobilizing development investment capital of Vientiane Capital is considered based on comparing its impact on the growth and economic development of Vientiane Capital through each mobilization stage, as well as the actual mobilization of development investment capital of some countries in the region.

6. New contributions of the thesis:

- Explain the theoretical basis of the economic development investment process, factors affecting the economic growth and development of Vientiane capital, and provide a system of indicators to measure the effectiveness of the economic development investment process.

- Applying theory to measure and evaluate economic development investment activities in the capital Vientiane

- Proposing solutions for the economic development of the capital Vientiane from extensive investment to intensive investment, ensuring stable and sustainable development.

7. Structure of the thesis

In addition to the introduction, table of contents, references and conclusion, the thesis is divided into 3 chapters:

Chapter 1: Investment in local economic development - theoretical basis and practice

see you off

Chapter 2: Current status of investment and economic development in Vientiane Capital

period 2007 – 2011

Chapter 3: Some solutions to increase investment in economic development of Vientiane Capital until 2020.


CHAPTER 1: INVESTMENT IN LOCAL ECONOMIC DEVELOPMENT THEORETICAL AND PRACTICAL BASIS


1.1. Concept of investment in local economic development and the impact of economic development investment on growth and development

1.1.1. Concepts

1.1.1.1 Investment

According to the modern economic dictionary, investment in a broad sense means the sacrifice of current resources to carry out certain activities to bring investors certain results in the future, which results must often be greater than the costs of the resources spent. The resources spent can be money, natural resources, other material assets or labor. The monetary expression of all the resources spent above is called investment capital.

According to the above concept, the results of investment are the increase in financial assets (capital), physical assets (factories, roads, other material assets), intellectual assets (cultural level, expertise, science and technology, etc. of the people). The results achieved from investment contribute to increasing the production capacity of society.

In a narrow sense, investment only includes activities that use current resources to bring investors or society future results greater than the resources used to achieve those results.[16]

According to the Investment Promotion Law of Laos 2009, investment is defined as the investor bringing his/her assets, which can be tangible or intangible assets, to carry out investment activities in the Lao People's Democratic Republic[19].

If considered from the investment perspective, investment is the activity of using


existing resources to increase physical assets, human and intellectual resources to improve the living standards of the population or to maintain the operational capacity of existing assets and resources.

1.1.1.2 Development investment

Development investment plays an important role in local economic growth and development. Before assessing this role, we will study the concept of economic growth and development, specifically:

Economic growth:

Economic growth is the increase in income of the economy in a certain period of time (usually one year). The increase is often expressed in scale and speed. The scale of growth reflects the increase more or less, while the growth rate is used with the meaning of relative comparison and reflects the fast or slow growth of the periods.

Thus, the nature of growth is to reflect the quantitative change of the economy. Nowadays, the requirement of growth is associated with sustainability or ensuring the highest quality of growth.

Economic development:

Development is understood as the process of progress in all aspects of the economy. Economic development is seen as a process of transformation in both quantity and quality, it is a close combination of the process of perfecting two economic and social issues. According to this understanding, development must be a long-term process and determined by internal factors of the economy.[16]

Development investment is a basic part of investment, which is the current spending of capital to carry out activities to increase or create physical assets (factories, equipment...) and intellectual assets (knowledge, skills...), increase production capacity, create more jobs and for development purposes.

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