VietNamNet Bridge - Many economic zones (EZs) have been left idle because they cannot attract investors, but experts agree that revoking investment licenses would not be a good solution.

Once the head of the Quang Tri EZ Management Board, Ha Sy Dong, now deputy chair of Quang Tri province, member of the National Assembly’s Finance & Budget Committee, has deep understanding about EZs in Vietnam.

Dong used the phrase “EZ syndrome” when talking about the establishment of of EZs some years ago.

Vietnam is striving to become an industrialized country by 2020. Provincial authorities all want to have EZs in their localities, hoping they will help attract investors.

However, many of the EZs established in recent years have been left idle or are ineffective. 

“The occupancy rate in EZs is not as high as expected, despite a lot of investment incentives promised to investors,” he said.

The low occupancy rate in EZs might be a reason behind the government’s decision to stop licensing more EZs and focus on using the existing ones.

Nguyen Huu Duc, a member of the Economics Committee, said that many investors had not made any move to start registered projects. Or they had only sluggishly implemented the projects just to “book a seat”.

How to deal with ineffective EZs?

The question remains open-ended. Economists point out that the existence of idle EZs is a waste for the national economy. They have asked local authorities to revoke the licenses of the EZs’ developers.

Current laws stipulate that local authorities and state management agencies have the right to take back land and investment licenses if they cannot implement or deliberately delay the implementation of registered projects.

Twelve projects in Nhon Hoi EZ have had their investment licenses revoked, while the Chan May–Lang Co EZ Board of Management is planning to revoke the licenses of nine projects.

However, this may not be the best solution.

What will happen if investors have their licenses revoked? They will return the project and the allocated land to the local authorities, an analyst said. And no one would receive benefits in this case.

Dong thinks that it would be better to “share sympathy” with businesses rather than impose sanctions on them. 

The global economic crisis, the domestic economic downturn, the East Sea uncertainties and high bank-loan interest rates all have dealt strong blows to businesses.

“Investors would give back deserted land to local authorities if they are told to return investment licenses,” Dong said. “But if we grow agricultural and industrial plants on the land, we would earn less money than developing factories and industries.”

Dat Viet