[Vnbiz] SOUTH OF VIETNAM HITS 11.6PCT GROWTH RATE

[Tai Phan]

*SOUTH OF VIETNAM HITS 11.6PCT GROWTH RATE
* Monday January 28, 2008, 2:45 pm

HANOI, Jan 28 Asia Pulse - The southern key economic area has achieved an
economic growth of 11.6 per cent, higher than the national average level of
7.25 per cent for the 2001-2006 period.

The zone in previous years has been the region in Vietnam with the fastest
economic growth, and serves as a major link in international integration.

During this period, the zone's agricultural production rose by 1.6 times,
industrial production by 1.28 times and services by 1.5 times.

In 2006, the southern key economic area contributed 46.2 per cent to the
nation's gross domestic product (GDP), 81 per cent export value, 69.7 per
cent industrial value and 31 per cent of total FDI capital.

Officials of the southern key economic area attributed the impressive
economic growth to the areas efforts to speed up economic restructuring with
a focus on industrial production.

The rate of industrial value in the area's GDP rose from 54.37 per cent in
2000 to 62.61 per cent in 2006 and agricultural value dropped from 10.47 per
cent to 7.01 and the services sector from 35.16 to 30.38 per cent.

Higher investment and increased exports have led to the success of the area,
which has 66 industrial and export processing zones.

The zones have contributed 20 per cent of the country's industrial value and
20 per cent of exports in 2006.

Export value in the area grew by an average 17.1 per cent a year from 2001
to 2006.

In 2006, the area earned export revenue of US$32 billion, of which HCM City
contributed 42.69 per cent.

By the end of 2007, the key southern economic area had attracted 5,383
foreign investment projects with a total registered capital of US$45.2
billion, representing 54.4 per cent of the countrys total FDI.

Land scarcity

The southern key economic zone, however, is becoming less attractive in
luring foreign investment because of the soaring price of land, fewer land
plots for industrial production and lack of skilled human resources.

Nguyen Duc Dong, who works at the Vietnam Social Science Institute, said the
zone needed to strengthen cooperation with localities in the zone to exploit
their economic potential to achieve higher growth.

After 10 years of establishment, the zone still lacks a master development
plan to help the zone grow sustainably and raise its competitiveness on the
world market.

He proposed that the government establish a leading agency to take charge of
management of the entire southern economic area to avoid overlapping
production of industrial products and raise efficiency.

The southern key economic zone has a total area of 30,856sq.km and
15.2million people.

It includes HCM City, and the provinces of Binh Duong, Dong Nai, Ba Ria-Vung
Tau, Binh Phuoc, Tay Ninh, Long An and Tien Giang.

(VNA)
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