Delta ponders costs of stampede to build factory sites

Almost all the provinces in the Mekong Delta have joined the “race” to develop industrial zones (IZs), considering these an effective way to develop local economies.  To date, however, most IZ’s are empty or poorly tenanted, and the costs to the Delta’s fragile environment are becoming evident, says Tuoi Tre. Some are reconsidering their strategy, aiming toward more sustainable development.

The My Tho IZ in Tien Giang province lies on the bank of the Mekong’s upper branch.  For nearly ten years, factories in this IZ have discharged untreated water directly into the river.

Tran Huu Hiep of the Southwest Region IZ Steering Board said that at the end of 2008, 151 IZs had been established in the Mekong Delta.  However, only 34 percent of them were occupied. Some IZs were filled to only five percent of their area. Many IZs still stand empty after site clearance.

Long An, the Delta province nearest HCM City, has made the most intensive effort to lure industry. According to Phan Thanh Phi, chief of the Industrial Zone Management Board of Long An province, 7400 hectares of infertile land have been reserved for industrial development. Fifteen IZs have been licenced.  The province has compensated former owners and cleared 4500 hectares. It has built infrastructure to serve 3000 hectares but so far, only 20 percent of the area is in use.

Long An has another 43 industrial complexes that use around 7000 hectares. Only a few of them run effectively. The remaining areas lie empty and, Phi says, it will take a long time to complete the infrastructure of these IZs. The province may have to abolish some “stalled” industrial complexes.

None of the operating IZs have clean water supply systems. Neither the province nor investors have funding for this, so the local government has allowed investors to drill wells, though it knows that this will have a bad impact on the environment.

Others race to emulate Long An

Commenting on the development of IZs and industrial complexes in the Mekong Delta in recent years, Tran Huu Hiep of the Southwest Regional Steering Board says “developing IZs is a trend in the Mekong Delta. All the provinces are building IZs to achieve a shift in their economic structure, but they don’t integrate their IZ planning with environment protection.  They’ve accepted projects that have been turned down by other provinces – polluting industries like shipbuilding, wood pulp production and fabric dying.”

A latecomer in the race of industrial development, Tien Giang province – just south of Long An – was happy to clear 590 hectares of forest in Go Cong Dong District though the belt of trees played an important role in flood protection.  Then, when the public protested, the local government hurriedly promised to replant the forest and build another dike to protect the current dike.

And, though over 200 hectares of forest in Go Cong Dong were chopped down two years ago so that Vietnam Shipbuilding Industry Group (Vinashin) could build a shipyard, this area is not yet in use.

The external costs add up

Long An and other Delta provinces are getting worn out trying to deal with the pollution caused by industrial projects. Nguyen Van Thiep, director of the Long An Department of Natural Resources and Environment, explains that “when investors flocked to Long An, we were very happy to welcome all of them. Now the people complain a lot about pollution. It is very hard for us to inspect, supervise and remedy the pollution caused by these firms”.

From January to September this year, Thiep’s office department discovered and fined 107 companies for violations of the law on environment, collecting over 1.6 billion dong in fines. Twenty-five companies were suspended indefinitely from operation for repeated violations. These tend to be firms that process aluminum and steel, engage in dying and weaving, slaughter and process cattle and poultry. If all the IZs in the province were filled up, environment pollution would be a great deal more serious.

In Can Tho City, Party Secretary Nguyen Tan Quyen says agricultural and fish processing industries account for 98 percent of the city’s industrial output. This sector, too, is the object of complaints for lack of proper pollution control.

Industry is a means, not an end

In 1998-2008, a total of $7.9 billion in investment was attracted by the 13 Mekong Delta provinces. Long An, Kien Giang and Can Tho account for 80 percent of the total investment.The new investment in Kien Giang province is mainly tourism infrastructure on Phu Quoc island, whereas Long An, north of the Vam Co river and near HCM City, has been most successful in attracting factories.

Can Tho City Party Chief speaks ruefully about the race to build IZs and industrial complexes in the Mekong Delta.  “For a long time, we didn’t understand thoroughly the meaning of the word “sustainable development.”  For that reason, in some places and at some times, we developed industry hastily and unsystematically. Now we have to suffer long-term consequences. It is critically important that we accurately understand the comparative advantages of each province so we can make plans for sustainable development.”

At a recent seminar on shifting economic structure held in Ben Tre province, scientists warned that the Mekong Delta has a unique ecological system and environment.  If attention is not given to preserving nature’s gift, future generations will be prey to environmental disasters.

Commenting on the Ben Tre province decision to prioritize industrial development to 2020, Dr. Pham Thi Ngoc My, head of the Finance and Marketing University, said “rampant development of industry will not be useful and we will have to pay a high price for environment pollution. It is necessary to bring into full play the province’s comparative advantages instead of racing with other provinces to raise the contribution of industry to the local economy.”

My urged that the province build on its pure environment, flourishing ecosystems and vast orchards, a good foundation for development of tourism, services and hi-tech agriculture.

Dr. Nguyen Thanh Tuyen, head of the Economics and Finance University, said that Mekong Delta provinces will find it very difficult to make a big economic leap if they place overly high hopes in industry. He emphasized that the forté of many Mekong Delta provinces is trade and services related to tourism, export of agricultural products, communications, transportation, healthcare and education.

Prof. Tran Dinh But, the former head of the Institute for Central Economic Management, urged the Mekong Delta provinces to refrain from emphasizing industrial development. Echoing other speakers, But stressed that Ben Tre and other provinces have great advantages in developing agriculture and meat production to meet the world’s increasing demand for food.

Some provinces are reconsidering their goals

Many provinces in the Mekong Delta have recognized the problems spawned by the race to develop industry. Pham Thanh Khon, a provincial deputy director for planning and investment, said “In Vinh Long, we will not use all the land we have reserved for industry. Instead we will look around to see what other provinces are doing, then choose the areas where we have the greatest advantage to develop.”

Long said that trade and services like housing, resort, transportation, entertainment, hi-tech medicine and vocational training will be Vinh Long’s development priorities for the next ten years. The central government permitted Vinh Long to use 2178 hectares of land to develop industry but the province has actually built only two IZs, Hoa Phu and Binh Minh, totaling less than 300 hectares.

Truong Quoc Tuan, the Kien Giang provincial Party chief, said his province has reviewed the planning of IZs with a view towards sustainable development. Izs, power plants, construction material producers, seafood processors or seaports must obey strict rules on environment.

Tien Giang Province Vice Chairman Nguyen Van Phong says that his province welcomes only less polluting projects and gives priority to hi-tech agriculture. He said Tien Giang’s advantage is its special rice and fruit trees. These crops are now planted under Global GAP standards, with a view to exports.

In addition, ecological tourism and resort will be developed by Tien Giang jointly with its neighbours, Ben Tre and Vinh Long, Phong said.

Experts talk about industrial development in the Mekong Delta

Dr. Vo Hung Dung, Director of the Vietnam Chamber of Commerce and Industry’s Can Tho branch: The transformation of our economic structure is the Party and State’s policy for development. However, many agricultural provinces with poor infrastructure were overly eager to destroy their rice fields and orchards to build IZs. Now have to pay for it.

Around 70 percent of the land taken up by IZs is still undeveloped. Most IZs attract small local investors, mainly seafood processors. There are only a few foreign-invested projects and food processing projects, which are what the Mekong Delta needs the most. Meanwhile, many social problems arise when local people have to give up land to industrial zones.

In short, the Mekong Delta provinces have built or planned to build too many IZs. Under the pressure of economic growth, many provinces welcomed all kinds of investors, regardless of their fields of operation or their capability.  There were four provinces competing to persuade Vinashin to locate a shipyard on their territory – and in the end, it just walked away.

It is said that IZs in the Mekong Delta are underutilized because of incomplete infrastructure and the impact of the global economic slowdown. However, that’s only part of the story.  Yes, Vietnam faced economic reduction in 2008, but the Vinashin project goes back further than that. After two years, our state-owned shipbuilding company didn’t break ground in Hau Giang. I think they just accepted the land thinking of doing other business in the future. After all, is it really necessary to build three or four large shipyards in the Delta?

Economists have been warning localities for years to not develop industry at any cost but nobody listens to them. I think the Mekong Delta provinces need to quickly review their IZs, reconsider the fields of investment and the fields of priority. They should not just rush to develop IZs because others are, but reserve certain land while waiting for opportunities to attract new investors in the areas of greatest potential. They must say ‘no’ to projects that can cause environmental pollution.

Especially, provinces that have similar advantages in terms of land and geography should work together to promote investment.

Dr. Nguyen Van Nam, director of the National Economics University: The current economic crisis is a good opportunity to develop a “green” economy in Vietnam.

The meaning of “green” is broad. It encompasses the use of natural resources without destroying them, the production of goods by non-polluting technologies, the use of goods in ways that are safe for the environment and the application of new technology to protect and restore the environment.

Vietnam can build green cities or green IZs. To take this opportunity, Vietnam needs to crack down on polluting enterprises and exact strict punishments. The nation should have policies encouraging enterprises to invest in green economy, starting in  agriculture. Nam said that Vietnam greatest potential is in agriculture and tourism.

“Let’s turn Vietnam into a safe vegetable and fruit garden for the whole world. We should start right now. Our products are competitive in the European and American markets. Vietnamese enterprises have to invest in technology to satisfy the strict standards on environment, hygiene and safety of these markets,” Nam said. “Sometimes, we’ll have to challenge unfair technical and hygienic barriers,” he added.

To become a tourism powerhouse, Vietnam has to improve its polluted environment, Nam said. “Our determination to do this job would be enough to attract visitors, and an effective marketing method for Vietnamese goods in the green economy.

“Though this job needs huge capital, if Vietnam doesn’t do it right now, possibly we will lose the opportunity to restore our environment,” he said.

VietNamNet/Tuoi Tre

Tags: Vietnam industrial zones