HCMC lacks favorable conditions to develop full potential: PM

By Huu Cong   October 15, 2020 | 04:06 am PT
HCMC lacks favorable conditions to develop full potential: PM
A view of Ho Chi Minh City in 2019. Photo by VnExpress/Vu Le.
PM Nguyen Xuan Phuc believes HCMC has the financial ability to thrive but needs a special mechanism and greater efforts to do so.

"HCMC needs to pioneer breakthrough mechanisms and policies to make use of all existing resources for socio-economic development," Prime Minister Nguyen Xuan Phuc said at the opening session of the city’s 11th Party Congress for the 2020-2025 term Thursday.

So far, the city has asked permission to remodel its urban administration, form a "city within a city," temporarily called "Thu Duc City", a merger of eastern districts 2, 9 and Thu Duc, seeking to transform into a world financial hub.

"The economic scale of HCMC is now larger than that of Vietnam before 2005 and is even larger than some countries in the region," he said, adding the city has changed a lot, becoming more beautiful and cleaner, and that the life quality of its people has been much improved.

Since 2016, the city has grown annually at over 7.7 percent, making up 22 percent of the country’s total growth and contributing 27 percent toward the national budget. The local average income per capita, meanwhile, is 2.4 times higher than the national average, which remained at $2,740 last year.

However, the PM said the city still has many limitations as its economic growth was not commensurate with its potential and location while its growth engine is yet to be clearly shaped and its urban planning keep pace with development.

In addition, the city has not been able to make science and technology a driving force for development and failed to reach its targets for administrative reform.

"For the 2016-2020 term, the PM has worked directly with the city on eight different occasions to listen and help tackle its difficulties and help it grow faster and stronger, but there are still some issues that have not been fully resolved."

Prime Minister Nguyen Xuan Phuc speaks at the opening session of HCMCs 11 Party Congress for the 2020-2025 term. Photo by HCMC Media Center.

Prime Minister Nguyen Xuan Phuc speaks at the opening session of HCMC's 11 Party Congress for the 2020-2025 term. Photo by HCMC Media Center.

He demanded the congress to bring up issues for "discussing frankly" so the city could eliminate limitations and do better in the next term, especially with the pandemic still developing and growing trade protectionism and competition among nations in the global market.

"This is a heavy task, but with potential and advantages that are not available anywhere else but in the city, we believe these goals are quite possible," he said.

Local Party Secretary Nguyen Thien Nhan said at the event though HCMC, the biggest metropolis in Vietnam, has been put through many difficulties, but remains the nation’s economic locomotive.

Its labor productivity is 2.6 times higher than the national average while its labor force makes up just 8.6 percent of the nation’s total.

The city has for decades been the country’s largest moneymaker, with its contribution to the national budget rising from 26.5 percent per year in the 2001-2010 period to 27.5 percent in the 2011-2019 period.

HCMC is also the largest industrial and service center, accounting for 15 percent and 33 percent of growth, respectively.

He admitted the local Party Committee has not been able to help the city grow stronger nor adequately fight corruption in accordance with Party requirements and people's expectations.

Nhan has been HCMC’s Party chief since May 2017. The congress will last for four days to vote in members to serve the Party Committee's new term.

At a meeting on Sunday, Nhan said the city is directing its focus towards the innovative urban area, or Thu Duc City to create a foundation for HCMC to become a "smart city," a master plan it formulated in 2017.

Other targets the city is focusing on include building good relationships with other southern localities and the central government, as well as boosting international cooperation, he said.

City leaders, including him, have more than a few times lamented the budget HCMC is allowed to keep for itself.

In the 2016-2020 five-year period, Vietnam's largest city kept just 18 percent of its annual revenues, and submitted the rest to the national budget. This ratio, they said, is among the lowest for megacities around the world and has been one reason holding the city from developing further.

Since last year, HCMC has been working on a detailed plan to raise the retention ratio to 24 percent in 2021-2025, and 33 percent in 2026-2030, the ratio the city was granted back in 2003.

This is needed for the city to ensure stable development and continue playing its role as the nation's economic hub, providing the biggest contribution to the national budget, chairman Nguyen Thanh Phong said in December last year.

To put the figures into perspective, HCMC last year earned over VND412 trillion ($17.8 billion), exceeding the target it was set, which was VND400 trillion.

This target was 1.1 times higher than those of the remaining four federal municipalities, Hanoi, Hai Phong, Da Nang, and Can Tho, put together, which is VND365.9 trillion.

Respective budget retention ratios for Hanoi, Hai Phong, Da Nang, and Can Tho for the 2016-2020 period, however, are far above that of HCMC, at 35, 78, 68, and 91 percent.

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