Tourism, trade, education and training, transportation, finance, banking, etc. services develop compared to other provinces in the region after 2010 and the following years. Protecting the ecological environment, natural landscapes, preserving and promoting traditional cultural and ethical values, harmonizing economic benefits with political and social stability, national security and defense. Revenue from tourism, hotel and restaurant services reached over 950 billion VND in 2010 and reached 5,000 billion VND in 2020; over 10,000 billion VND in 2030; tourists reached about 1.2 million arrivals (of which: international visitors reached 20,000 arrivals) in 2010 and reached about 3.1 million arrivals (of which: international visitors reached 70,000 arrivals) in 2020; Total retail sales of goods and social service revenue reached 6,360 billion VND in 2010 and over 24,600 billion VND in 2020 and increased rapidly in the period 2020-2030.
From the above options for attracting FDI for economic restructuring ( option 2 ), it is necessary to select a reasonable and effective economic structure. The economic structure that needs to be selected is a dynamic structure, quickly adapting to changes in the domestic and world markets; accelerating the development process of the province towards industrialization and modernization; effectively exploiting resources and comparative advantages; rapidly increasing labor productivity; forming key industries and products, taking advantage of and having effective plans to attract FDI for economic restructuring. From different approaches, from balancing and calculating many development possibilities of economic sectors, there are three cases of economic structures to choose from for the orientation of attracting FDI for economic restructuring.
Table 3.3: Growth rate of economic sectors in the economic structure of Thai Nguyen province, period 2010-2015 ( unit : % )
P/A 1 | P/A 2 | P/A 3 | |
The whole economy | 12 | 13 | 14 |
1- Industry – Construction | 14.0 | 16.5 | 18.0 |
2- Service | 12.0 | 13.5 | 14.0 |
3- Agriculture and forestry | 4.0 | 4.5 | 4.0 |
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Source: Documents of the 18th Thai Nguyen Provincial Party Congress and author's forecast
Option 1: Shifting the economic structure in the direction of increasing the proportion of the service sector in the province's economy steadily, the proportion of the industrial sector rapidly increasing, and the proportion of the agricultural sector increasing.
The industry has decreased slowly. In this case, Thai Nguyen province has not been able to attract and maximize the factors, including FDI capital for industrial development.
Option 2: Shifting the economic structure in the direction of increasing the proportion of industry and services rapidly, while the proportion of agriculture rapidly decreases accordingly. This case allows Thai Nguyen province to find solutions to promote factors and FDI capital to shift the economic structure in the industry and services in which the province has advantages.
Option 3: The economic restructuring in the direction of increasing the proportion of industry and services rapidly, while the proportion of agriculture decreases more rapidly than the two cases above. This case allows promoting factors and FDI capital to achieve a very high level of economic restructuring, but is subject to too great an impact from the outside, from frequently fluctuating factors, including FDI.
Table 3.4: Comparison of options for FDI attraction plans for economic restructuring of Thai Nguyen province by 2015 and vision to 2030
P/A 1 | P/A 2 | P/A 3 | |
1- GDP per capita | Not yet reached the national average in 2015 | Achieved the national average 2015 | Exceeded the national average in 2015 |
2- Responsiveness labor | Adequate labor balance in the province | Unemployment in natural level | Labor shortage skilled |
3- Ability to meet investment capital, including FDI | Moderate efforts needed in attracting FDI | High effort required in attracting FDI | Great efforts are needed to attract FDI. |
4- Economic structure | Economic restructuring is not fast | The economic restructuring is in the direction of accelerating the industrial and service economic restructuring, in which industry is the main | CCKT is shifting strongly towards modernity. |
Source: Thai Nguyen Provincial People's Committee (2010) and author's calculations
ii) Through analysis and comparison, the CDCCKT option can be selected (according to option 2). With this target CCKT, specific orientations to attract FDI aim at CDCCKT
- For industry and construction : The CDCCKT will continue to prioritize FDI attraction, technological innovation to create high-quality products with strong competitiveness in the market for heavy industries such as ferrous metallurgy, non-ferrous metallurgy, mechanical engineering, engine manufacturing, power plant spare parts, and mining. Due to geographical disadvantages, the steel rolling metallurgy industry will only develop on a suitable scale. The coal mining industry needs to continue investing to increase output. New mines, especially rare metal mines, need to ensure effective exploitation and use, linking exploitation and processing to increase the value of goods, limiting the sale and export of raw or semi-processed materials, linking production with environmental protection. The mining and production of construction materials such as cement, high-grade bricks, and roofing materials is considered a key new development direction of the province. The processing industry of agricultural and forestry products is focused on ensuring sufficient long-term production materials with a gradually expanding scale. Light industries such as garment and manufacturing are developed to meet the employment needs of workers, encourage the use of local science and technology workers, and gradually create the formation of high-tech projects; especially IT technology and biotechnology.
- For agriculture and forestry : Attract FDI to develop agriculture and forestry in the direction of ecological agriculture, high technology associated with processing industry, with urban areas and export orientation; associated with economic restructuring towards industrialization and modernization of agriculture and rural areas. Forming concentrated commodity areas. The main plants and animals are: For four groups of food crops; industrial crops; fruit trees, forestry trees with the main crops being rice, corn, peanuts, soybeans, tea, planted forest wood for paper and plywood materials. Develop forest area to achieve a coverage rate of over 50%. Stabilize and protect upstream forests, develop economic forests with a scale of about 80-100 thousand hectares to ensure raw materials for the particle board and paper industry. Strongly develop hilly economy, renovate mixed gardens, develop tea trees, fruit trees for this land.
- For the service sector : Attracting FDI to rapidly increase key services; forming sub-sectors and new service products with high added value in line with the province's advantages; rapidly increasing high-quality services, especially services for on-site export; increasing services provided by the private sector. Focusing on developing tourism in three directions: Eco-tourism associated with favorable conditions and advantages of natural landscapes, scenic spots and cultural identities of ethnic minorities in mountainous areas associated with introducing regional specialties; tourism associated with ATK revolutionary historical relics; exploiting Nui Coc Lake tourism in the national tourism route program, tourism in the vicinity of Hanoi.
From the above general orientations, through the calculation process, we have obtained the economic structure and labor structure for Thai Nguyen province in the years up to 2015 and the vision to 2030 (see Table 3.5).
Table 3.5: Economic structure of Thai Nguyen province by GDP and by labor (%)
Target
2005 | 2010 | 2015 | 2030 | |
I. Economic structure by GDP | 100 | 100 | 100 | 100 |
1. Industry - Construction | 38.64 | 41.6 | 46.5 | 50 |
2. Services | 34.82 | 37.3 | 38.5 | 45 |
3. Agriculture - Forestry | 26.54 | 21.1 | 15 | 5 |
II. Economic structure by labor | 100 | 100 | 100 | 100 |
1. Industry - construction | 13.75 | 20.1 | 23.9 | 30 |
2. Services | 19.16 | 22.9 | 26.7 | 45 |
3. Agriculture, forestry and fishery | 67.09 | 57 | 49.4 | 25 |
Source: Thai Nguyen Provincial People's Committee (2010), Thai Nguyen Provincial Party Committee (2010) and author's calculations
The labor structure is shifting towards increasing labor in the industrial and service sectors, labor in the service sector increased from 19.16 to 22.9% in 2010, 26.7% in 2015 and 45% in 2030; corresponding to industrial labor
increased from 13.75% in 2005 to 20.1% in 2010, 23.9% in 2015 and 30% in 2030; Agricultural labor will decrease from 67.09% in 2005 to 57% in 2010, 49.4% in 2015 and 25% in 2030.
Based on the orientation and targeted economic restructuring plans, the demand for FDI capital to serve the economic restructuring of Thai Nguyen province will be forecasted until 2015 and with a vision to 2030.
3.2.2.4. Orientation for selecting priorities to attract FDI for the socio-economic development of Thai Nguyen province
The selection of priority FDI attraction for economic restructuring of Thai Nguyen province must be considered and weighed in the current conditions and future development trends, that is, the industry with the highest ability to effectively use available resources to create high contribution value in production, at the same time creating leverage to promote the development of other economic sectors, ensuring fast and sustainable economic restructuring.
Based on the ability to mobilize natural and social resources and the ability to mobilize FDI capital for economic restructuring; on the basis of selecting economic restructuring and economic restructuring plans for the period 2011-2015 and vision to 2030, development priorities can focus on the following directions:
i) Prioritize FDI attraction to improve industrial development
The period 2011 - 2015 is the period when it is necessary to shift to attracting FDI to invest heavily in industrial restructuring towards developing new industrial sectors with the potential to bring high added value to the province (such as electronics, information technology); it is necessary to gradually reduce FDI attraction into industries whose production capacity has reached its limit (metal production) or types of production that waste resources and pollute the environment. Therefore, attracting FDI to industrial restructuring needs to be implemented as follows:
- Attracting FDI associated with the development of mechanical industry along with the development of other industries, effectively serving the cause of industrialization and modernization of rural agriculture of the province. This is a supporting industry that needs special incentives for development; all new investments go directly into advanced, modern technology; focused, concentrated investment, not spread out to serve production: Engines, agricultural machines, auto and motorbike spare parts, post-harvest processing and preservation equipment, tools, instruments, spare parts... Encourage and facilitate economic sectors to have
FDI capital participates in the mechanical development program, especially mechanical engineering serving agriculture and rural areas.
- Prioritize selective FDI in a number of high-tech industrial fields suitable to the conditions of Thai Nguyen province such as: Manufacturing electrical and electronic components, assembling digital devices (computers, phones, monitors); building software parks.
- Create the most favorable conditions to attract FDI to invest in large existing construction material factories in the area to maximize their capacity. Prioritize investment in large FDI projects producing new products with advanced technology such as: high-grade paving stones, precast concrete components, refractory materials, high-dolomite cement, production lines for tuynel bricks, unburnt bricks... Investment projects to produce high-grade ceramics and porcelain...
- Except for the processing industry that needs to continue investing heavily, FDI should not be attracted to the remaining industries or should be reduced, especially the mineral mining and processing industry.
ii) Prioritize FDI attraction to improve the agricultural and forestry sector's economic structure
FDI aims to restructure the agricultural and forestry sector towards commodity production with high efficiency and sustainability; select and quickly apply new scientific and technological advances to improve productivity and quality of agricultural products with the aim of ensuring food hygiene and safety;
Attracting FDI to develop agriculture, forestry and fishery based on the development of commodity agricultural production based on the province's advantages to increase product value per unit area. Building concentrated commodity production areas associated with the processing industry. Forming agricultural production belts in the direction of clean agriculture around urban areas, focusing on high-quality tea, vegetable, flower and ornamental plant products to serve the consumption needs of people in the province, especially the needs of people in urban areas surrounding Thai Nguyen province;
Attracting FDI aims to restructure the agricultural and forestry economy in the direction of prioritizing rapid increase in the proportion of the livestock industry, restructuring and improving the quality of livestock herds.
Poultry, focusing on developing livestock with high economic value (beef cattle, beef buffalo, lean pigs) and poultry on a farm scale far from residential areas, raised using industrial methods along with disease prevention measures and environmental protection;
Attracting FDI to rapidly develop farm economy and cooperative economy. Linking farm economic development with strengthening and developing production relations in rural areas, building a new, fair and civilized rural area with constantly improved material and cultural life; FDI in the forms of BOT, BTO, BT and PPP to develop infrastructure systems such as rural roads, wholesale markets for agricultural products, solidifying intra-field canal systems; technical facilities for seed production and supply;
Along with attracting FDI to promote the transfer and application of advanced technology, new scientific and technical advances in production; focus on investing in post-harvest processing and preservation technology; use land effectively, sustainably, improve varieties, shift crop structure, develop forest capital, high agricultural technology, biotechnology, and provide agricultural market information for rural people. Preserve and develop rural industries and craft villages to create export products with high economic value. Encourage FDI attraction to build an electronic transaction system, form an e-commerce application transaction market to increase the ability to promote and access foreign partners. On that basis, promote traditional products and regional specialties of Thai Nguyen to expand export capacity, increase the value of contribution to GDP, contributing to economic restructuring.
iii) Prioritize FDI attraction to improve service industry
To attract FDI to improve the service industry of Thai Nguyen province, it is necessary to prioritize FDI for developing services at a faster pace and with better quality; rapidly increase key services, form new industries and service products with high added value in line with the province's advantages. In addition, it is necessary to pay attention to services that contribute to improving the quality of people's lives and bring high added value such as medical services, entertainment, and community services. This is also
basis to increase the ability to attract FDI for foreign investors on the basis of ensuring the provision of services of international standard quality for foreign investors coming to do business and live in Thai Nguyen.
Focus on attracting FDI to develop tourism quickly, sustainably, achieve high socio-economic efficiency, become an important economic sector, promote the development of a number of other economic sectors; contribute to accelerating the speed of economic restructuring of the province;
Focus on attracting FDI to prioritize new construction and upgrading and renovating the market system; build commercial centers and supermarkets in urban areas; and prioritize building wholesale markets in mountainous areas, highland areas, ethnic minority areas, and areas with special difficulties.
iv) Prioritize attracting FDI in developing and transferring science and technology to improve the socio-economic situation of Thai Nguyen province.
In order to attract FDI for the socio-economic development of Thai Nguyen province, it is necessary to prioritize FDI attraction associated with the transfer, construction and development of scientific and technological potential: Using multi-layered technology, prioritizing modern technology, combining with traditional technology suitable for the province's production level; enhancing and accelerating the speed of technology transfer, especially specific technologies in mining, mineral processing, agricultural and forestry processing; FDI associated with equipment serving scientific and technological management, promptly responding to research and development and basic investigations; innovating personnel policies for scientific and technological workers on the basis of creating an environment for scientific and technological activities.
Orientation to attract FDI to select technology of some important industries: Mechanical engineering technology, application of design and manufacturing technology.
3.3. SOME MAIN SOLUTIONS TO ATTRACT FDI TO TRANSFORM THE ECONOMIC STRUCTURE OF THAI NGUYEN PROVINCE BY 2015 AND WITH A VISION TO 2030
To be able to quickly and effectively attract FDI capital to serve the socio-economic development in order to achieve a reasonable target socio-economic development of Thai Nguyen province by 2015 and vision to 2030, in the trend of integration and joining the WTO.