IMPACT OF WTO ACCESSION ON THE SOCIO-ECONOMIC DEVELOPMENT
STRATEGY OF HANOI
Dr. Hoang Van Nghien
Chairman, People's Committee of Hanoi
International economic integration is an irreversible trend of our time, and has been exerting
an impact and driving the socio-economic development of all countries around the world. One can
say that international economic integration is to step by step specify and to ensure the consistency of
liberalization around the world, given a time frame and location. Participating to bilateral and
multilateral trade agreements, joining free trade areas and common markets are different levels of
international integration, depending on the level of development, awareness, and commitment of
each country. Among the international economic institutions, WTO is the largest and most important
global trade organization. WTO is also very demanding in terms of transparency in trade rules,
reduction of import tariff, and with an approach to tariff elimination, liberalization of trade in goods
and services, investment, intellectual property, most favored nation - or normal trade relation.
The international economic integration process of Vietnam was launched long time ago, and
was particularly accelerated with new actions when Vietnam officially adopted the Law on Foreign
Investment (enacted in 1987); becoming a member of the IMF, the World Bank, the ADB (from
1993); becoming the full member of ASEAN (from 1995), joining AFTA (from 1996).
So far, basically the negotiation for Vietnam's accession to the WTO has been taking place
smoothly. Vietnam receives the support and understanding, and commitment for support in many aspects
from many countries and international organizations. Vietnam is considered to be a special case that
need preferences while joining the WTO. The factor that determines the speed of WTO accession for
Vietnam depends a great deal on the commitment and internal preparedness, to overcome internal
barriers, to make substantial change in the market development in the country.
1. OVERVIEW ON THE SOCIO-ECONOMIC DEVELOPMENT OF HANOI
Hanoi has an extremely important geopolitical location, compared to other provinces or cities
in the country. Hanoi is the heart of the country, a national political and administrative center, a
large scientific center for education, economic and international exchange(1).From Hanoi, one can
easily travel to provinces and other cities in the north and the country by roads, railway, waterway,
and airway (2). With the rehabilitation of highways 1A, 1B, 5, 10, and 18, the construction and
expansion of airports and sea ports in the region, Hanoi has an opportunity to develop production
and business, to expand its market, promote trade in goods and services with other regions and
countries, and to take active step to international integration.
Hanoi has a potential to develop tourism. Such famous tourism attractions as Ha Long, Do
Son, Cat Ba, Con Son – Kiep Bac, Den Hung, famous pagoda groups in Ha Tay, beautiful caves in
Resolution 15 of the Politburo, 15 December 2000, on direction and task for Hanoi development during 2001-2010
Hanoi has Noi Bai airway border pass, is located near big ports, Cai Lan and Hai Phong (that account for 40% of total
port capacity of the country).
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Ninh Binh and Ha Nam, are all located not far from Hanoi. Given this distance, Hanoi can cooperate
with the adjacent provinces (in the northern focal economic zone and the Red river delta) to form
unique tours to attract both domestic and foreign visitors.
In addition, Hanoi has advantages compared to other provinces in terms of urban
infrastructure, educated labor force, and science and technology development. Currently, the
industrial labor productivity of Hanoi is 1.4 times higher than that of the Red river delta, 1.8 times
higher than the northern highland. Hanoi accounts for 82% (Hanoi and Hai Phong account for 96%)
of export values and 50% of regional retail sales. In 2000, Hanoi accounts for 9% of total industrial
output of the country, 83% of electrical engine production capacity of the country, 74% of aluminum
products, 74% of electric fans, 58% of television assembly, 48% of bicycle tire, 40% of canvas
shoes, 35% of bicycles, and 30% of toilet ceramics.
Together with the whole country in joining the international economic integration, especially
in preparation for WTO accession, Hanoi made important achievements in many areas. The
economy grows steadily at high and stable rate, the economic structure is shifted toward
industrialization and modernization; more domestic investment is mobilized, foreign investment
shows positive trend. The urban technical infrastructure is rehabilitated and upgraded to be more
compatible and modern. The cultural and social activities made good achievements, and considered
by ministries and central agencies to be the leading city in the country in many indicators. The rural
and suburban area are flourishing. The political system is strengthened, national security and defense
are consolidated, social order is ensured. The material and spiritual life of people is significantly
improved. The external relations are expanded, and the position of the capital city in the region and
the international community is enhanced. The participation by the capital city in the overall external
relations of the state becomes more significant.
1.1. Sustainable economic growth of the capital city
During 1991-1995, the average GDP growth of Hanoi was 12.5% per annum; during 1996-
2000 it was 10.6% per annum (the average growth for 1991-2000 is 11.6% per annum). In 2001-
2002, GDP growth of the city was 10.16% per annum.
Table 1. Economic growth of the capital city during 1991-2002
Indicator 2001 2002
GDP growth of Hanoi 12.5 10.6 10.02 10.3
- Industry & construction 13.7 14.0 10.2 16.2
- Agriculture, forestry, fishery 5.6 3.4 1.2 2.7
- Services 12.6 9.5 10.5 7.3
Source: Hanoi Statistics Office
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The city’s GDP in 2002 is 3.6 times higher than in 1990. Hanoi’s share in the country’s GDP
has increased from 5.51% in 1990 to 6.15% in 1995 and 7.52% in 2002. Hanoi is one of the
provinces with high GDP growth, at 1.3-1.5 times higher than the country’s average. This shows the
leading role of the capital city in economic development of the northern region in particular and of
the country in general.
The economic structure shifts to the right direction, as mentioned in the master plan for socio-
economic development of the capital city during 2001-2010 (At the end of 2001, industry accounted
for 36.8%, agriculture for 2.7%, and services for 60.5% of the city’s GDP, by the end of 2002, the
shares are 38.8%, 2.4%, and 58.8%, respectively. Within industry, more focus is on high-tech
industry development, with high quality and strong capability of penetrating the market).
Table 2. Economic restructuring of the capital city during 1991-2002
Indicator 1991 2000 2001 2002
Total 100 100 100 100
- Industry & construction 25.9 38.5 36.8 38.8
- Agriculture, forestry, fishery 8.1 3.5 2.7 2.4
- Services 66.0 58.0 60.5 58.8
Source: Hanoi Statistics Office
Hanoi has the highest concentration of industry in the north and the second highest in the
country (after Hochiminh city). The average industrial output growth during 1991-1995 was 13.7%
per annum, and during 1996-2002 was 14% per annum (in 2002 industrial GDP in the city grows by
16.2% over 2001). Manufactured goods are more diverse to meet the domestic and export demand.
Despite lower growth, agriculture, forestry, and fishery sectors play important role in job
creating, income generation for suburban population. In recent years, the agricultural production
structured started shifting toward more clean products, with higher quality and efficiency. Many
scientific and technological achievements were applied to production (biotechnology, clean
production technology, post-harvesting technology). Yield per hectare of arable land is increased (3).
Many traditional craft activities receive support from the city authority. The rural life is gradually
changed, with more production and better living standard in the suburban area.
Trade and services are gradually expanded to meet the demand of production and
consumption. Trade in the capital city in the past years has moved toward market mechanism and
better perform its distribution function in the location and the country as the whole The state trading
is dominant and regulate wholesale activities in a number of key commodities, participates in some
retails in a more civilized and modern way. The total retail sales in the city grow by 9-10% per
annum (and by 11% in 2002). In general, trading activities in the city take place smoothly, goods are
In 2000 the average output per hectare is more than VND 40 million, or 4 times that of 1990
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improved in terms of quality, with more varieties and features, and domestic goods are preferred by
consumers, thus the consumption goes up.
Tourism also develops and become more diverse with many varieties of new services
(ceremonies, ecotourism, travel, etc.). Tourism facilities are improved, with enough capacity to
receive millions of visitors per year. From 1991 to 2002, foreign visitors to Hanoi increase about 11
times (from 60,000 in 1991 to 650,000 in 2002). Hanoi is receiving visitors from almost 150
countries around the world, the majority of visitors are from France, Japan, China, United States,
and Australia. Domestic tourists and those going oversea also increase significantly. Revenue from
tourism increases steadily over the years (from VND 86.6 billion in 1991 to VND 1,900 billion in
Table 3. Major indicators of tourism in Hanoi during 1991-2002
Indicator 1991 2000 2001 2002
Foreign visitors to Hanoi ('000 people) 60 423 500 650
Revenue (VND billion) 86.6 1 416.6 1 650 1 900
Foreign exchange earnings (US$ million) 3.4 72.2 83.1 -
Source: Hanoi Statistics Office
In recent years, tourism in Hanoi is linked to the market and becomes market driven, all
aiming at economic efficiency. Tourism in the city develops strongly, becomes diverse and enriched
in terms of marketing, advertisement, and other supporting services. The awareness is raised about
the importance of tourism in socio-economic development of the capital city. Authorities of all
levels have coordinated in tourism activities and work together to solve any bottleneck in the
industry's development. The airline has launched many more international; routes going to Hanoi,
and worked with the tourism industry to advertise in the country and abroad (4). Visa application and
immigration procedures are continuously improved to be more simplified and convenient.
Tourism companies in the capital city take active measures to find more market, shifting from
passive to active, promoting travel services, with focus on both incoming and outgoing visitors, both
international and domestic visitors, thus boosting revenue (the share of travel services increases from
2% in 1995 to 15.5% in 2000 and 17% in 2001). The number of travel agencies and tourism services
increases from 142 in 1999 to almost 800 in 2001.
1.2. Exports and imports of goods
Trade promotion receives increasing attention by authorities of different levels and enterprises.
Hanoi has trade relations with about 150 countries and territories; about 1095 representative offices of
foreign entities are located in the city, operating in trade, banking, insurance, construction, transport, etc.,
735 exporting firms, of which 137 firms achieve export value of more than US$ 1 million.
In 2001 new routes from Hanoi to Beijing and Yunan, in 2002 to Tokyo have been launched.
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Exports of goods in Hanoi in recent years kept on increasing, meeting the targets and
contributing a great deal to the implementation of the socio-economic development strategy. In
2002, export value of Hanoi reached US$ 1,654.6 million, or 6.2 times higher than that of 1990
(accounts for 10% of the total exports of the country, and increases by 10.1% over 2001). In the
export structure, the state sector still plays the leading role, accounts for 79.87%; the foreign
invested sector accounts for 12.75%, and the non-state sector accounts for only 7.38% of export
Import value of the city in 2002 reached US$ 990 million, accounts for 5% of the total import
value of the country, and increases by 13.8% over 2001 (an increase of 33 times compared to 1990).
Table 4. Hanoi's exports by commodities during 1991-2002
Indicator 1990 2000 2001 2002
Total exports 100 100 100 -
- Agricultural products 15.3 9.1 9.2 -
- Forest products 4.5 1.7 1.6 -
- Sea products 1.6 2.9 2.8 -
- Manufactured goods 70.5 70.7 69.0 -
- Others 8.0 15.6 17.5 -
Source: Hanoi Statistics Office
The export commodity pattern of Hanoi also shows an increasing share of manufactured goods
and declining share of primary products. The share of agricultural products in the export value of
Hanoi has declined from 21.4% in 1990 to 13.6% in 2001; the share of other products (handicraft,
ceramics, etc.) increase from 8% to 17.5% during the same period. This export commodity structure
is relatively appropriate to the more industrialized economic structure and tends to tap on the
comparative advantage of the capital city.
1.3. Investment promotion
In recent years, the investment climate in the city was steadily improved. Hanoi is always one
of the leading provinces in attraction of both domestic and foreign investment. During 2000-2002,
the city has attracted almost VND 55 trillion of investment (on average increases about 17% per
annum; of which 60% is investment by state-owned enterprises and non-state enterprises in the city
for change in technology, equipment, and business expansion.
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17 33 24 14.8
Real estate, consulting
Real estate, consulting
By the end of 2002, the city has established investment cooperation relations with 42 countries
and territories. Hanoi has attracted 546 FDI projects with the total registered capital of US$ 8.86
billion (implemented capital is US$ 3.37 billion). Many large scale FDI projects have been licensed
and are on-going now. For example, TV Picture Tube Orion-Hanel Ltd. (that produces and
assembles TV picture tubes) has total investment of US$ 178 million; Yamaha Motor Vietnam Ltd.
(that produces and assembles motorcycles) has total investment of US$ 80.27 million; Denso
Vietnam Ltd. (that produces and design car parts) has US$ 12.7 million; Canon Vietnam (that
produces and assembles color printers) has US$ 76.7 million; Sumitomo Bakelite Ltd. (that produces
computer plastic circuits) has US$ 35 million; and Zamil Steel Vietnam has US$ 20 million.
Currently, in the city there are 439 on-going FDI projects with the total investment of US$
7.77 billion, of which 192 projects are 100% foreign capital (with the total capital of US$ 829.8
million), 220 joint ventures (with US$ 5811.7 million), and 27 business cooperation contracts (with
US$ 1128.9 million) (5).
In terms of geographical distribution, ASEAN leads in registered capital (accounts for 44.4%
of total) and is the third largest in terms of project number (14.8% of all projects), next comes Japan
(16.4% in capital and 19.6% in projects), Western Europe and Nordic countries (12.2% in capital
and 16.4% in projects), Korea (10.3% in capital and 7.8% in projects), China, including Hong Kong
and Taiwan (5.7% in capital and 20.8% in projects).
In addition to FDI, Hanoi also mobilized US$ 700 million of official development assistance
(ODA), of which 27% is grant and 73% is loans. ODA projects have contributed to improve and
upgrade the infrastructure of the city, facilitate the further FDI attraction and domestic investment, to
expand production, create jobs and improve the social welfare.
The data is for the end of 2002
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Like the foreign invested enterprises, domestic enterprises in the city also take active measures
in changing their technology and equipment to increase the productivity and improve the product
quality. Typical cases are Hanoi Brewery, Rang Dong Light Bulb and Thermos Factory, Thang
Long Metal-Mechanics Company, Viet-Tiep Lock Company, Hanoi Plastic Company, Garment
Company No40. Thanks to the investment in right direction, most of the companies record high
revenue growth, with many products exported and penetrating foreign market, and their taxes paid to
the government always increase over the years, with decent pay to their employees.
Within 2000-2002, almost 10,000 enterprises are established under the Enterprise Law in
Hanoi, with the total registered capital of VND 13,400 billion. Up to present, the total number of
enterprises established under the Enterprise Law in the city is 15,800, with the total registered
capital of more than VND 23,000 billion (including the increase in registered capital during the
enterprise's expansion). The growth rate of registered capital is higher than the growth rate of new
enterprise creation (in 2000 the average registered capital of an enterprise was VND 0.89 billion, in
2001 it went up to VND 1.26 billion, and in 2002 to 1.67 billion). The scale of enterprises is also
expanded to catch up with the development process and new competition environment. These
enterprises contributed to job creation and income generation for people. A number of enterprises
can produce quite competitive products and can penetrate the market.
Beside the 9 old industrial zones, the city has built another 5 concentrated industrial zones
with the total used area in the first stage of 770 hectares (the total investment in infrastructure is US$
252 million), including Sai Dong A, Sai Dong B, Thang Long, Noi Bai, and Dai Tu. Many factories
with tens of million US$ of investment in such industries as manufacturing, car assembly,
motorcycle, telecommunication, electronics, construction steel, have been built and are operating in
these industrial zones.
Since 1998, beside the individual land distribution to enterprises, the city authority has built
small and medium industrial complex with sufficient technical infrastructure in order to move the
polluting industries outside the city, and to provide land to enterprises for their production. So far the
city has developed 10 small and medium industrial complexes (of which 3 are completed and rented
out to enterprises for their production facilities).
2. OPPORTUNITIES AND CHALLENGES TO THE CAPITAL CITY IN WTO
2.1. Major opportunities
- - Joining the WTO, Vietnam will enjoy the most favored nation status without any condition,
and the import tariff imposed by the member countries will be substantially reduced, and Vietnam
can enjoy the dispute settlement mechanism in fair trade with WTO member countries, when
disputes occur, and as a developing country, Vietnam also enjoys the GSP. Such favorable
conditions will allow Hanoi to develop the advantages of the capital city, a national political and
administrative center, a large scientific center for education, economic and international exchange in
Vietnam; it is also an important transport juncture in the center of the Northern delta, in river, road,
and air way. This city ha a long history with many landscapes and monuments, heritage, cultural
tradition, hard working and hospitality of the Trang An people.
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- Joining the WTO, the goods produced in Hanoi will be able to penetrate to more markets
abroad, especially such big market as the United States, Canada, and Europe; this allows the capital
city to more effectively participate in the international labor division, to efficiently use its resources
(as resources are shifted from the low productivity and low efficiency sector to the high productivity
and efficiency sectors).
- Joining the WTO will increase the attractiveness to foreign investment and technology
transfer to Hanoi, this allows Hanoi to quickly absorb the achievements of modern science and
technology and managerial experience around the world, helping Hanoi to better develop its
advantages in terms of educated labor (with about 200,000 intellectual workers, of which 17,000
acquired master degree, doctorate degree, and a cohort of skilled workers, compared to the whole
- Joining the WTO also facilitates Hanoi people to have access to more variety of products,
with better prices and quality, and creates motivation for Hanoi enterprises to invest more in
technology process, production improvement to become more competitive. This will improve the
competitiveness of the economy as the whole, of enterprises and products, and create internal
strength for economic restructuring, making the capital city's economy more dynamic.
2.2. Challenges for Hanoi in WTO accession
First, while joining the WTO, Vietnam will have to modify and improve the legal framework
and accelerate the reform to comply with the WTO rules. Those changes require the city's
administration and the enterprises to be more innovative and adaptive to the international practice, to
which they are still unfamiliar. The adaptiveness of enterprises to the global economic environment
is still weak, and there are gaps in the management capacity. We still do not have good staff in
professional skills, language, management, and good knowledge of partner country's customs.
Second, while joining the WTO. Vietnam will have to open the domestic market, including
sectors such as banking, insurance, telecommunication, and consulting, while the competitiveness of
many firms in Hanoi remains limited, thus this may cause a real difficulty to the capital city's
economy. Some firms will go bankrupt since they are unable to compete right in the domestic
Third, although Hanoi is a location where public education level is high in Vietnam, the
human resources are yet to meet the requirement of the integration process, the trained labor only
accounts for 46% of the labor force, and not so many workers have high technical qualification.
Fourth, while joining the WTO, Hanoi will have to accept the social impacts such as growing
unemployment due to the economic restructuring, bankruptcy of some enterprises, and the rising
rich and poor gap.
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3. ACTIONS TO BE TAKEN BY HANOI IN WTO ACCESSION TOGETHER WITH THE
International economic integration in general and WTO accession in particular make Hanoi to take
necessary measures to boost the socio-economic development while complying with the WTO
commitments and the requirements of international economic integration in general. Bellows are some
contents that the city is going to complete and reform in the coming future:
3.1. Focus on legal framework and social environment improvement through accelerate public
. More efforts will be focused on developing rules and regulations to specify the Party's and
the government's policy, with some particular mechanism under Resolution 15 of the Politburo and
the Ordinance of Hanoi city, to ensure clarity, transparency, equity, and compatibility to the
It is imperative to accelerate the public administration reform, reviewing all administrative
procedures, mechanism, and policies in order to amend and facilitate the development of domestic
resources, further mobilize domestic and foreign investment for socio-economic development of the
city, especially in information technology and its application to management and business.
A number of regulations should be promulgated soon to develop potential social resources for
development of the city, such as policy for attracting investment by different ownership and
enterprises in the city, projects for issuing bonds for the city's development, strong decentralization
to the district and local department level in managing construction and investment. The land use
right should be put on auction (after building the infrastructure) to raise revenue for the development
of the city's infrastructure. BOT and BT forms of investment should be piloted for some focal
3.2. To develop various markets, to develop and enhance the capacity of market institutions to
be appropriate to the WTO requirements
Hanoi will work together with central agencies, professional associations, and other provinces
to develop appropriate institutions for WTO and to ensure the smooth functioning of the city's
economy, following the market economy with socialist orientation
Priority will be given to financial market development, technology market, labor market, real
estate market, information market, and other business supporting services (especially investment
consulting services, transfer of technology, trade promotion, legal services, and external relation
3.3. To move the economic structure faster toward industrialization and modernization,
to expand external economic relations and to prioritize sectors in which the city has
To strengthen and develop the advantage of being the political, administrative center, a center
of science, education, economic and international transactions of Vietnam, and to seize the
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opportunities for more effective WTO accession, Hanoi will develop an economic structure with
industry-service-and agriculture, and move to service-industry-agriculture. Accordingly, in services,
special attention will be paid to high value added and quality services such as finance, banking,
tourism, trade, health care, science, education, information, and external relations. In industry,
export and high-tech industries will be developed, e.g. electric, electronic equipment, information
and telecommunication, new materials. In agriculture, more focus will be on ecological agriculture
and high-tech agriculture.
Domestic and foreign investors should be encouraged to invest in the socio-economic
development of the city. Investment should be promoted in areas of comparative advantage of the
city, competitive sectors, high-tech industries, biotechnology, and non-polluting industries. Low-
tech projects or unskilled labor intensive projects will be recommended for the adjacent provinces.
Development plans should be revised and completed to select and prioritize competitive
industries and products, to guide enterprises in their investment in production and business; at the
same time, appropriate support is needed, administrative procedures simplified to encourage and
attract investment in these industries.
There should be plan to quickly develop the supporting industries. More investment should be
focused on production of parts and components for manufactured goods, in which Hanoi has
comparative advantage and which can be exported.
Agricultural production should be shifted toward cleaner products, with high quality and
efficiency, more research should be done on how to develop urbanized and ecological agriculture.
Agricultural production should be combined with tourism development and environment protection.
Cutting edge of the city's agriculture should be developed, focusing on seed production and such key
products as organic vegetables, flowers, lean pork, dairy cows, and high quality aquaproducts. High-
tech agricultural production area should be formulated, with some high quality agricultural products.
The city should cooperate with the Ministry of Agriculture and Rural Development to build the
High-tech Agriculture Park.
3.4. Further improve the investment and business environment
The socio-economic development plans, sectoral plans, policies for supporting enterprises by
the government and the city authority should be made public, more efforts should be focused on the
implementation of the Enterprise Law and post-registration management over enterprises.
More public administration reform should be done in investment (especially in foreign direct
investment) to be more transparent with one stop shopping. There should be few criteria for approval
and project appraisal (only a few key criteria such as legal status, financial capacity of investors, the
relevance of project to the plan and socio-economic benefits, level of technology, appropriateness in
land use should be kept).
Investors, enterprises and interested individuals should be facilitated to access information on
investment related procedures (business registration, investment license, certificate for investment
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preference). Businesses should be allowed to registered online. Ecomerce should be developed, and
necessary steps to be taken to develop egovernment in the capital city.
Hanoi will study the trend in investment by institutions, companies, and big investors, the
investment environment, and target the investment from selected countries (like China), or work
closely with ministries and central agencies to do so. This will help identify sectors for calling
investment, and necessary adjustment is needed in the project list offered to investment in the city
(accompanied by policies and tax incentives or land use preferences). Each project offered to
investment should prepare all the basic information to that investors can easily study and select.
Promotion and dissemination on the investment environment and potential for tourism should
be done in flexible way, with close coordination between different levels and with central agencies.
International cooperation should be tapped to promote domestic and foreign investment and tourism,
this should help enhance Vietnam's and Hanoi's image in the international community. The
awareness among different authorities and people about the role of investment promotion should be
raised in the process of socio-economic development of the city.
Investment in industrial zones should be accelerated, with more promotion to fill in the
concentrated industrial zones in the city. Foreign investors are encouraged to invest in the
concentrated industrial zones in the city, with various incentives provided, such as tax holiday, tax
incentives, especially for projects of special preferences. Incentives will also be provided to
investment in infrastructure of concentrated industrial zones, with longer payment period (land
rental can be paid in 3 or 4 installment, instead of lump sum for 50 years as it is the case now).
The city authority will apply flexible mechanisms to allow the shift in investment projects,
foreign investors can invest in industrial complex managed or built by local investors. Foreign
corporations or companies with strong financial resources can take over the non-starter foreign
investment projects, or unprofitable projects.
Infrastructure in the large concentrated industrial zones should be built first, using domestic
resources in order to attract foreign investment and move the polluting enterprises out of the
Policy framework should be worked out to build in advance resettlement area in accordance
with the overall planning, and not to wait until the project is approve. This helps facilitate the
resettlement process and fast land acquisition for investment projects in the city.
Small and medium industrial complexes should also be developed, with handicraft clusters and
villages to provide land to enterprises. Support should be provided to polluting enterprises located in
residential area so that they can change the technology or to move to the industrial complex.
Periodic meeting with entrepreneurs should be held to inform them about the city's
development policies, to address any bottleneck faced by the enterprises. The role of professional
associations, firms' associations should be strengthened to support enterprises in borrowing fund for
investment, change the technology, expand the market, and protect the members' interests in any
commercial dispute, to boost production and business activities.
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3.5. Resources will be focused on developing, modernizing, and completing technical
In the short run, resources will be focused on developing the infrastructure that directly facilitate
such export-oriented services and production such as airport, sea port, transport network, bonded
warehouse, modern transport mode, telecommunication in industrial zones, and external relation
services (meeting, finance, banking, insurance, telecommunication). Support will be made to
develop tourism and make it the driving industry of the capital city.
Foreign invested enterprises are encouraged to invest in developing new urban areas, urban
infrastructure projects (bridges and roads), public transport like tramway, buses, and social welfare
projects like hospitals, international high schools and universities.
More support will be provided to develop the outside-the-fence infrastructure (roads, water
supply and drainage, telecommunication) for the concentrated industrial zones, and to reimburse
investors with their advance investment in infrastructure.
The suburban infrastructure will also be upgraded and improved to attract more investment for
socio-economic development in these areas.
Investment is called for preserving and rehabilitating the tourism resources. Investment in
rehabilitation of historical heritages, monuments, tourist attraction, festivals, folk culture activities,
and handicraft villages should be socialized.
3.6. More training to staff in order to improve the human resource.
The city will have a plan to train staff in consulting, planning, external economic policy, to develop
a cohort of entrepreneurs, directors, business managers, and qualified technicians with good
knowledge, morality, and qualification, working in external relations, production, business, and
export-oriented services, import substitution.
More attention should be paid to training and improving the quality of staff working in foreign
invested projects. The personnel arrangement for Vietnamese staff should be reformed; we need
more Vietnamese staff with degree and equivalent qualification to foreign counterparts to be
appointed to leadership positions in joint venture companies.
Enterprises are encouraged to linked vocational training with labor recruitment, with
preferences of local labor. Teaching quality should be enhanced, with more teaching tools for
practical vocational training. High quality vocational training centers should be built in the city
(using the funding from the budget, domestic investment, and foreign funding). More vocational
training is needed for the exported labor.
3.7. Enhance the competitiveness and efficiency of enterprises in the city
The state-owned enterprises in the city should be further reformed and restructured, with more
equitization, sales, contracting, leasing, merger, and liquidation. Efforts should be focused on
developing business groups and corporation of large scale, with strong technology, to operated in the
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preferred sector of city's development, in the parent-subsidy model or joint stock companies. The
target is by 2005 the number of state-owned enterprises under the city's patronage will be reduced by
50%. In parallel with the restructuring and efficiency improvement of the state-owned enterprises,
Hanoi will consistently follow the policy of multiple ownership economy.
The city authority will instruct the project on reducing the intermediary cost for enterprises
(and to ensure equality between different ownership). Border pass check will be set up in the city to
facilitate exports and imports by enterprises and to reduce intermediary cost. Representative offices
of Hanoi authority abroad should be opened to promote investment and trade, transfer of technology
and labor cooperation (first targeting the markets of the United States, Japan, and Australia).
Further incentives should be provided to facilitate enterprises to invest in production
expansion, market penetration (more working capital, subsidies in interest rate, funding for
international standard management system).
Special preferences are provided to foreign investment in banking, capital intensive sectors
like electronics, telecommunication, biotechnology, mechanics, urban infrastructure, new urban
area, public transport. Cooperation with centrally owned enterprises is critical in selecting
equipment, advanced technology, combining the domestic resources and potential with foreign
resources to make the best use of both.
The city authority will support enterprises in investing in the change of technology, with more
attention on the driving industrial enterprises, export oriented enterprise. Enterprises are encouraged
to applied accelerated depreciation to reinvest in their capital equipment, improving the quality of
their product and competitiveness. For the unused or unproductive state-owned equipment, the
enterprises are encouraged to transfer the ownership through auction to recoup some proceeds for
Enterprises are encouraged to applied the scientific and technological achievement and
advanced management system in their production and business, as part of the competition strategy,
to rationalize their production and business process and reduce production cost.
3.8. Active measures should be taken to cope with and mitigate the negative impact of
international economic integration
A system will be in place to collect and process information, specific steps should be taken to
prevent and mitigate the economic shock that might be caused by bankruptcy of enterprises,
economic disputes in international trade, violation of intellectual and industrial property, to combat
the abuse of and deception in technology transfer that may make Hanoi a "dumping ground" of
obsolete technology from the world.
Active measures should be taken to prevent social impacts of growing unemployment, rising
rich and poor gap, unplanned migration, social evil, degradation in morality, commercialization of
ethical and cultural values.
13 (16) Paper, Hanoi
Stricter criteria should be developed and enforced for environment protection. Waste disposal
and emission should be put under strict control to prevent industrial facilities from destroying the
During the process of WTO accession, Hanoi will work closely with ministries, central and
local agencies in the country, first of all provinces and cities in the northern focal economic zone and
adjacent provinces to develop together.
We strongly believe that given a clear and consistent viewpoint of the Vietnamese
government, together with active measures toward such development orientation, Hanoi will
strongly develops while Vietnam accedes the WTO in particular and join the economic integration in
14 (16) Paper, Hanoi