Giving priority to economic growth quality

At the seminar, Mr. Phong said immigrants to the city in the last 20 years has increased by 8% annually with a population density of 4,000 people/km2, 13,600 people/km at districts, up 12,85 times than that of districts.

 “This causes pressures of living, traveling, security and order which has impact on quality of sustainable growth of the city”, said Mr. Phong. He stressed that improvement of growth quality must be in line with social security and better living quality.

He noted some “bottlenecks” including poor transport infrastructure; lack of belt roads, expressways and inter-regional public transport system
In addition, new road density stays at 1,98km/km2 (far below standard of 10-13,3km/km2. “However, the city is now facing shortage of human resource for infrastructure development”, stressed Mr. Phong, saying that HCMC is not allowed to get foreign loans but get it through Central Ministries and Departments.

In term of economic development, the city has now only 1% of big enterprises but acccounts for 66% of registered capital. While, 99% of small and medium-sized companies or evn minor companies accounts for 34% of registered capital, 36% of large companies are now operating in the property sector which fails to create driving force for economic growth.

While agriculture contributes less than 1% of GRDP but uses over 55% of land area, service-industry contribute 83% of GRDP but use less than 6,8% of land area. Added value per 1 hectare of service-industrial land is 813 times higher that that of agricultural land.
This is a big issue which draws a special attention of the city. At first, the city will make more efforts in completing mechanisms to unleash development potential and enhance growth quality, giving priority to growth quality instead of growth speed.

Mr. Phong said that driving force for growth quality and competitiveness improvement lies on key economic zones, especially urban areas. But, the system of urban management and inter-regional linkage related mechanisms and policies fails to keep up with development requirements. Therefore, the city will continue promoting the key roles of urban areas to enhance growth quality and competitiveness. Another solution worked out by the city’s leaders is to consider global integration as a key factor to improve growth quality and competitiveness.
Chairman Phong also highly appreciated ideas of experts and scientists and said the city will make efforts in turning these ideas into specific actions to improve growth quality and competitiveness.

To create favorable conditions for experts, scientists to contribute ideas to the city’s sustainable development, Mr. Phong requested HCMC Development and Research Institute to propose coordination mechanisms between experts, scientists with HCMC People’s Committee.
In addition, Department of Home Affairs is in charge of establishing economic consulting group to promote long-term sustainable economic development plan. “This is a place where knowledge and contributing ideas of experts, scientists, Vietnamese overseas, people will be spread and turned into actions”, added Mr. Phong.

“At the seminar today, the city’s leaders will make an order from experts, scientists to join hands in addressing challenges like environmental pollution, traffic jam, flooding, growth quality, competitiveness, etc.”, emphasized Mr. Phong.

Changing growth model

Addressing at the seminar, experts and scientists have analyzed the shortcomings of the city and proposed many solutions to enhance economic growth quality and competitiveness of the city.

Prof.PhD Nguyen Trong Hoai, Deputy Head of HCMC University of Economics said a growth rate of over 8% in the last few years is really high and it is hard for the city to make it higher in the coming time.

Therefore, Mr. Hoai suggested that the city should change the growth model in an efficient, creative manner towards long term targets. He said the city should give priorities to investment in technology and infrastructure to deal with traffic congestion while to promote creatitivity. Experts also stressed that the urgent matter needs to be addressed is to remove the bottleneck of mechanisms to improve competitiveness of the city.
Associate Prof.PhD Do Phu Tran Tinh, University of Economics and Law, said what the city needs to do now is to maintain the growth rate of 8%, it requires harmonious development policies between the city and neighboring localities.

Specifically, according to Mr. Do Phu Tran Tinh, the city needs to focus on key sectors like finance, service, hi-tech, ect. moving labor intensive sectors to satellite urban areas. This will help redesign the current space, to furhter attract foreign investment capital into hi-tech sectors.
“Another important factor is that HCMC needs to choose the the key segement of goods chain towards the direction that HCMC will become a production and supply base”, said Mr. Do Phu Tran Tinh.

It was suggested by experts that the city should strengthen infrastructure connectivity system to reduce bottlenecks at gateways. In the long-term, the city will work out solutions to limit population to under 15 million to reduce pressures on infrastructure, public services, to step by step improve living quality of local people.

Preparing resources for economic development

Addressing at the seminar, Secretary Nguyen Thien Nhan stressed the program on economic growth quality and competitiveness improvement is one of 7 breakthrough programs of the city to meet the requirements of global integration in the period of 2016-2020.

According to Mr. Nhan, the city will organize Conference of HCMC Party Executive Committee to assess the mid-term peformances of the city. "It is a hope of the city to receive constructive ideas of scientists related to development trends, forecasts, competitiveness of the city. These ideas will help the city put in place new solutions to make this program a success”, said Mr. Nhan.

Secretary Nhan affirmed the city still has land for development because the land planning for industrial and service development accounts less than 10% but make a contribution of 99% to the city’s economic development. While, land for agricultural development accounts for over 44% but contributes only 4% to the economic growth. Therefore, it requires a restructuring scheme of land.

According to Mr. Nhan, scienctific and technological resources of HCMC is huge but fails to be fully siezed by local enterprises, it requires to find out the reasons and suitable solutions.

Mr. Nhan cited that Irael has a population of 8,6 million but has the highest amount of startups per capita in the world. Policies and culture help Israel earn such a success. Specifically, Israel has successfully built the argument culture without fear of failure.

Especially, when a startup eligible for receiving money from the State but failing does not need to return the money. Once getting success, this startup business must pay back 35% of the total amount to refund others. Therefore, this contributes to the highly successful startups without any hesitance.

Mr. Nhan noted that Israel’s experience is a useful example for HCMC, the city needs a “Revolution in thinking” for businesses and scientists. Besides, HCMC must do research on solutions to quickly realize its mechanisms and policies towards Industry 4.0. Of which, the city needs to support enterprises from design, production management to sales, etc.

“It is necessary for the city to link IT (information technology) & AI (artificial intelligence) enterprises to pilot breakthrough programs”, revealed Mr. Nhan.

HCM CITYWEB