HCMC INSTITUTE FOR ECONOMIC RESEARCHHCMC INSTITUTE FOR ECONOMIC RESEARCH
HO CHI MINH CITY ECONOMIC OVERVIEW HO CHI MINH CITY ECONOMIC OVERVIEW
AND POTENTIAL FOR DEVELOPMENTAND 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 COUNTRYROLE 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 CountryThe Largest and Most Dynamic Economic Centre of the Country
ROLE OF HO CHI MINH CITY IN THE COUNTRYROLE OF HO CHI MINH CITY IN THE COUNTRY
Population in Ho Chi Minh City Population in Ho Chi Minh City 6.426.42 millionmillion personspersons in 2006 (whole country 84 million in 2006 (whole country 84 million persons)persons)
+ Accounting for only + Accounting for only 77.6.6% % population and over population and over 6% of labor force in the country, HCMC accounts 6% of labor force in the country, HCMC accounts for: for: + + 221-221-22% % of national GDP of national GDP + 30+ 30% % of national industrial output value of national industrial output value + + 2525..1% 1% of national value of goods and services of national value of goods and services + + 3636..7% 7% of national export turnover of national export turnover + + 2121.0.0% % of total investmentof total investment. .
ROLE OF HO CHI MINH CITY IN THE ROLE OF HO CHI MINH CITY IN THE SOUTHERN FOCAL ECONOMIC ZONE SOUTHERN FOCAL ECONOMIC ZONE (SFEZ)(SFEZ)
BÌNH
++ HCMC accounted for HCMC accounted for over over 80% value added80% value added of of serviceservice of the whole of the whole region (in 2005)region (in 2005); ; ++ 55.3% 55.3% export turnover export turnover of the whole regionof the whole region; ; 65.4% 65.4% import turnover of import turnover of the whole regionthe whole region; ; + + 46.9% value added of 46.9% value added of industrial value of industrial value of the the whole regionwhole region
(This is a dynamic region)
SOME DEVELOPMENT TARGETS – SOME DEVELOPMENT TARGETS – GDP GROWTH RATE (%)GDP GROWTH RATE (%)
Area:Area: 2,095 km22,095 km2 Population:Population: 6.4 million 6.4 million
Of which:Of which: Migrants Migrants 1.85 million (30%)1.85 million (30%) GDP:GDP: 12.0 billion USD12.0 billion USD GDP growth rate:GDP growth rate: 12.2% per year12.2% per year GDP per capita in 2005:GDP per capita in 2005: 1,970 USD1,970 USD Unemployment rate: Unemployment rate: 5.82 %5.82 % FDI inflow in 2006:FDI inflow in 2006: 2.28 billion USD2.28 billion USD Export:Export: 13.7 billion USD13.7 billion USD More than 76 Universities & Colleges with more than 380,000 More than 76 Universities & Colleges with more than 380,000
studentsstudents
SOME DEVELOPMENT TARGETS –SOME DEVELOPMENT TARGETS – GDP GROWTH RATE (%)GDP GROWTH RATE (%)
GDP growth rate during 1996-2005:GDP growth rate during 1996-2005: HCMC: 10.5%HCMC: 10.5% VN: 7.2% VN: 7.2%
GDP share of HCMC to the country keeps increasingGDP share of HCMC to the country keeps increasing
GDP Growth Rate - HCMC and Vietnam
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Year
GD
P G
row
th R
ate
HCMC
Vietnam
SOME DEVELOPMENT TARGETS – SOME DEVELOPMENT TARGETS – GDP STRUCTURE (%)GDP STRUCTURE (%)
GDP Structure (%)
Service51.1%
Agriculture1.2%
Industry and construction
47.7%
INVESTMENT CAPITAL MOBILIZED – INVESTMENT CAPITAL MOBILIZED – INVESTMENTINVESTMENT CAPITAL STRUCTURE (%)CAPITAL 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%)
Foreign direct investment - capitalForeign direct investment - capital
224
907
482 577776
963
2287
0
500
1000
1500
2000
2500
1 2 3 4 5 6 7
Year
Foreign Direct Investment (Million USD)
2000 2001 2002 2002 2004 2005 2006
Source: HCMC Statistical Office
Foreign direct investment - RankedForeign direct investment - Ranked
In 2006In 2006
CountryCountry Projects Projects CapitalCapital(million (million
$)$)
Hong KongHong Kong 148148 3,3873,387
TaiwanTaiwan 402 402 1,8731,873
SingaporeSingapore 207207 1,5751,575
SouSouth Koreath Korea 416416 1,2981,298
JapanJapan 242242 1,1471,147
USA.USA. 134 134 670 670
B.V. IslandB.V. Island 87 87 630 630
Source: HCMC Statistical Office
EXPORT EXPORT
5,900 6,246 6,3907,349
9,816
12,471
13,695
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Million USD
2000 2001 2002 2003 2004 2005 2006
Source: HCMC Statistical Office
POTENTIAL FOR DEVELOPMENT POTENTIAL FOR DEVELOPMENT Vietnam accesses to WTOVietnam 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)
POTENTIAL FOR DEVELOPMENTPOTENTIAL FOR DEVELOPMENT HCMC main development targets to the year 2010HCMC main development targets to the year 2010
City GDP growth rate (2006-2010): City GDP growth rate (2006-2010): 12% per year12% per year.. For economic sector:For economic sector:
Agriculture:Agriculture: 5.0% 5.0% Industry and construction:Industry and construction: 12.0% 12.0% Service:Service: 12.0% 12.0%
For economic structure:For economic structure: Agriculture sector (0.9%), Agriculture sector (0.9%), Industry and construction (48.7%) Industry and construction (48.7%) Service (50.4%). Service (50.4%).
POTENTIAL FOR DEVELOPMENTPOTENTIAL FOR DEVELOPMENT HCMC main development targets to the year 2010HCMC main development targets to the year 2010
Population:Population: 7.5 million 7.5 million (*)(*)
GDP growth rate:GDP growth rate: 12.2% per year12.2% per year
GDP per capita in 2010:GDP per capita in 2010: 3,000 USD3,000 USD
Unemployment rate: Unemployment rate: <5.0 %<5.0 %
Skilled labors: Skilled labors: 60%60%
Public transport (Bus):Public transport (Bus): 10% demand10% demand
Housing area:Housing area: 14 m2/person14 m2/person
For health care: For health care: 10 doctors/10,000 pers 10 doctors/10,000 pers
Completing educational compulsory of senior secondary school to the Completing educational compulsory of senior secondary school to the
year 2008. year 2008.
POTENTIAL FOR DEVELOPMENTPOTENTIAL FOR DEVELOPMENT 9 groups of service development 9 groups of service development
1.1. Financial, banking and insuranceFinancial, banking and insurance
2.2. Trade Trade
3.3. Transportation and logisticsTransportation and logistics
4.4. TelecommunicationsTelecommunications
5.5. Real estateReal estate
6.6. Consultant, scientific & technological researchConsultant, scientific & technological research
7.7. TouristTourist
8.8. HealthcareHealthcare
9.9. Education and trainingEducation and training
POTENTIAL FOR DEVELOPMENTPOTENTIAL FOR DEVELOPMENT Solutions for risks reduction Solutions for risks reduction
1. Infrastructure Development
2. Education and Training system Reform
3. Public administration reform
(Addressing bureaucracy)
In general, the stable politics and government consistency In general, the stable politics and government consistency of reform are good environment to invest to HCMC of reform are good environment to invest to HCMC
Thank you for your attentionThank you for your attention