The long coastline of 1,200 kilometers and 13 seaports, including 7 first-class ports, are the great advantages of the central coastal provinces to develop economy.

However, head of the Vietnam Economics Institute Tran Dinh Thien said that the advantages must be exploited reasonably.

The central region has good seaports, including Chan May and Da Nang, Ky Ha and Dung Quat, Quy Nhon and Nha Trang. These could serve as the springboard to boost trade and develop local economy. 

However, they could also become hurdles to economic development if provinces cannot cooperate for mutual benefits, but follow the ‘every man for himself’ policy.

“Local authorities, in order to develop local economy, all want to build seaports in their localities, even though there are seaports nearby,” Thien said.

The central region has good seaports, including Chan May and Da Nang, Ky Ha and Dung Quat, Quy Nhon and Nha Trang. These could serve as the springboard to boost trade and develop local economy.

There are six coastal economic zones in the central region with the total area of 152,000 hectares which have building factories, oil refineries and tourism development projects. However, the economic zones still cannot fully exploited.

This is explained by poor infrastructure conditions, including transport, information & communication, and industrial and urban infrastructure. The low quality of local labor force is also a reason.

“With no industrial ‘rear’ and urban underdevelopment, the advantage of having seaports doesn’t work, while the efforts to develop seaports by provincial authorities is a big waste and hurdle for development,” Thien said. “To some extent, this causes the so called ‘competing to the bottom’ effect”.

The ‘competition to the bottom’ phrase used by Thien is understood as competition in which no one can get benefits and all of them are hurt. 

As such, a vicious circle exists in the region with great economic potential: the more local authorities try to develop natural advantages, the more the investment attractiveness lessens, while the ‘competition to the bottom’ increases.

Sharing the same view, Huynh The Du from Fulbright Vietnam said that central provinces, when vying to attract investments, have offered the highest possible investment incentives.

Du suggested that instead of giving preferences to economic zones, it would be better to apply the Single Factory EPZ, i.e. giving incentives to every enterprise with no concern about the location. Enterprises do not have to be located in a ready-made zone to be able to receive incentives.

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