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HCMC INSTITUTE FOR ECONOMIC RESEARCH

HCMC INSTITUTE FOR ECONOMIC RESEARCH. HO CHI MINH CITY ECONOMIC OVERVIEW AND POTENTIAL FOR DEVELOPMENT. Du Phuoc Tan (M.Sc.) Head of External Cooperation Department of IER 20 June 2007. ROLE OF HO CHI MINH CITY IN THE COUNTRY. HCMC is an Economic, Scientific, Educational and Cultural Hub

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HCMC INSTITUTE FOR ECONOMIC RESEARCH

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  1. HCMC INSTITUTE FOR ECONOMIC RESEARCH HO CHI MINH CITY ECONOMIC OVERVIEW AND POTENTIAL FOR DEVELOPMENT Du Phuoc Tan (M.Sc.) Head of External Cooperation Department of IER 20 June 2007

  2. ROLE OF HO CHI MINH CITY IN THE COUNTRY HCMC is an Economic, Scientific, Educational and Cultural Hub The Largest and Most Dynamic Economic Centre of the Country

  3. ROLE OF HO CHI MINH CITY IN THE COUNTRY • Population in Ho Chi Minh City 6.42million persons in 2006 (whole country 84 million persons) + Accounting for only 7.6% population and over 6% of labor force in the country, HCMC accounts for: • + 21-22% of national GDP • + 30% of national industrial output value • + 25.1% of national value of goods and services • + 36.7% of national export turnover • + 21.0% of total investment.

  4. BÌNH ROLE OF HO CHI MINH CITY IN THE SOUTHERN FOCAL ECONOMIC ZONE (SFEZ) • + HCMC accounted for over 80% value addedof serviceof the whole region (in 2005); • +55.3% export turnover of the whole region; • 65.4% import turnover of the whole region; • + 46.9% value added of industrial value of the whole region (This is a dynamic region)

  5. SOME DEVELOPMENT TARGETS – GDP GROWTH RATE (%) • Area: 2,095 km2 • Population: 6.4 million • Of which: Migrants 1.85 million (30%) • GDP: 12.0 billion USD • GDP growth rate: 12.2% per year • GDP per capita in 2005: 1,970 USD • Unemployment rate: 5.82 % • FDI inflow in 2006: 2.28 billion USD • Export: 13.7 billion USD • More than 76 Universities & Colleges with more than 380,000 students

  6. SOME DEVELOPMENT TARGETS –GDP GROWTH RATE (%) • GDP growth rate during 1996-2005: • HCMC: 10.5% • VN: 7.2% • GDP share of HCMC to the country keeps increasing

  7. SOME DEVELOPMENT TARGETS – GDP STRUCTURE (%)

  8. INVESTMENT CAPITAL MOBILIZED – INVESTMENTCAPITAL STRUCTURE (%) • Proportion of remaining budget for HCMC: 26% and only responding to 25-30% investment of the city. • HCMC mobilized many investment sources: • HIFU (HCMC Investment Fund for Urban Development) • Urban Bond issued • BT (land area exchanged to build infrastructure) • Extra-fees (water, electricity) • Equitization • Structure of investment capital (2001-2006): • + State = 33,3% (Whole country 57,6%) • + Private = 48,3% (Whole country 26%) • + FDI = 18,4% (Whole country 16,4%)

  9. Foreign direct investment - capital 2000 2001 2002 2002 2004 2005 2006 Source: HCMC Statistical Office

  10. Foreign direct investment - Ranked In 2006 Country Projects Capital (million $) Hong Kong 148 3,387 Taiwan 402 1,873 Singapore 207 1,575 South Korea 416 1,298 Japan 242 1,147 USA. 134 670 B.V. Island 87 630 Source: HCMC Statistical Office

  11. EXPORT Source: HCMC Statistical Office

  12. POTENTIAL FOR DEVELOPMENT Vietnam accesses to WTO • Incentives for reform of laws and regulations (Investment Environment) • Public administration reform (transparency and publicity improvement) • Technical and social infrastructure investment (supported by government to enterprises) • Export market expansion (150 WTO members accounting for over 95% total trade turnover in the worlds)

  13. POTENTIAL FOR DEVELOPMENTHCMC main development targets to the year 2010 • City GDP growth rate (2006-2010): 12% per year. • For economic sector: • Agriculture: 5.0% • Industry and construction: 12.0% • Service: 12.0% • For economic structure: • Agriculture sector (0.9%), • Industry and construction (48.7%) • Service (50.4%).

  14. POTENTIAL FOR DEVELOPMENTHCMC main development targets to the year 2010 • Population: 7.5 million (*) • GDP growth rate: 12.2% per year • GDP per capita in 2010: 3,000 USD • Unemployment rate: <5.0 % • Skilled labors: 60% • Public transport (Bus): 10% demand • Housing area: 14 m2/person • For health care: 10 doctors/10,000 pers • Completing educational compulsory of senior secondary school to the year 2008.

  15. POTENTIAL FOR DEVELOPMENT 9 groups of service development • Financial, banking and insurance • Trade • Transportation and logistics • Telecommunications • Real estate • Consultant, scientific & technological research • Tourist • Healthcare • Education and training

  16. POTENTIAL FOR DEVELOPMENT Solutions for risks reduction • Infrastructure Development • Education and Training system Reform • Public administration reform • (Addressing bureaucracy)

  17. In general, the stable politics and government consistency of reform are good environment to invest to HCMC Thank you for your attention

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