Mekong Delta grapples with slower economic growth

VietNamNet Bridge – The Mekong Delta’s economy expanded 6.9% last year, well below 7.8% in 2015, marking the fifth consecutive year the delta had seen its economic growth cooling, according to data of the Southwest Steering Committee.

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Workers put bags of rice into a warehouse in the Mekong Delta. The delta continued seeing an economic slowdown last year – Photo: Trung Chanh/SGT

The average annual economic growth of the delta stayed at 10% in the 2001-2010 period before it fell to 8.8% in 2011-2014.

Son Minh Thang, deputy head of the committee, said the delta’s agricultural production value last year picked up a slight 0.57% against 2015 while its industrial production value rose 10.5% to VND617.63 trillion (US$27.35 billion).

Average occupancy at 51 industrial parks covering 1,998 hectares of the region had reached only 66% by the end of last year, Thang told a 2016 review conference in Can Tho City on Sunday.

The delta posted export turnover of US$13.7 billion, up 7.4% year-on-year, and spent US$6.5 billion on imports, up 8.3%, he said.

Regarding foreign direct investment (FDI) approvals, Thang said 171 fresh projects with total registered capital of US$1.36 billion were approved last year, increasing by 22 projects against 2015. Meanwhile, 115 operational FDI projects got the nod to add a total of US$555 million to their capital commitments.

The region is now home to 1,324 valid FDI projects with total pledged capital of more than US$18.9 billion, ranking fourth among seven economic regions of the country and making up 5.8% of all projects in the nation and 6% of total FDI capital, he added.

Last year, the delta had 7,890 new businesses established with registered capital of a combined VND55.57 trillion, up 9.4% and 7.7% respectively. The number of suspended enterprises that returned to business was 2,434, rising 16.7%.

Speaking at the event, Deputy Prime Minister Vuong Dinh Hue hailed the Mekong Delta for its effort to maintain an economic growth rate that was higher than the country’s average, which was 6.21%, attain 13% growth in retail sales of goods and services, above the nation’s 9%, and beat the State budget collection target by 11.3%, at VND56 trillion.

However, the delta faced some shortcomings last year, such as lower-than-expected FDI, which was put at less than US$2 billion.

Vo Hung Dung, director of the Vietnam Chamber of Commerce and Industry (VCCI) branch in Can Tho City, blamed heavy reliance on agriculture for the steady economic slowdown of the Mekong Delta.

The service sector in the delta is weak while the processing industry also depends on agriculture, he said. 

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SGT

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