New driving force for growth
14:58 26/04/2023
Facing difficulties caused by the fluctuation situation of the world economy, high inflation in many major economies and the increase in trade protection of the importing countries, creating a driving force for the growth of the economy of Vietnam and Bac Ninh province - a major industrial production center of the country has had a change.

For the first time after many years of growth thanks to the industrial sector, in the first quarter of this year, there was a sharp decline (negative 18.7%), leading to a decrease in the province’s gross product by 11.85% over the same period in 2022. Although the trade balance of the goods still maintained a surplus with a trade surplus of more than USD1.8 billion, it decreased sharply over the same period with two numbers (exports decreased by 19%; imports decreased by 29%). In the context that the main driving force for growth from the industrial sector is negatively affected, the set issue for the coming quarters of Bac Ninh is to promote new driving forces for growth from the service and investment public investment sectors.

Manufacturing electronic components at Hanpo Vina Company (Expanded Yen Phong Industrial Park)

Different from the gloomy color of the industrial sector, the service sector increased by 8.3% in the first quarter, contributing 1.49 percentage points to the overall growth of the province. The trade in service maintained a strong increase compared to the same period last year. Total retail sales of goods and services in the quarter was estimated at VND24,797 billion, up 27% over the same period. In which, the retail revenue was estimated at VND19,558 billion, up 30%; revenue from accommodation and catering activities was VND2,277 billion, up 48%. Especially, the travel and tourism reached VND21.5 billion, up 4 times, the recovery of this field has an important significance because the tourism is a general economic sector that has spreading effects on many other fields such as: transportation, accommodation, restaurant, art, entertainment... It is forecasted that the growth of the service sector continues to be a bright spot in the coming quarters, making important contributions to the overall growth of the economy.

One of the driving forces for the forecasted economic growth in the coming quarters is public investment. Because 2023 is the falling point of medium-term public investment as well as the infrastructure development package in the Post-pandemic socio-economic recovery and development program. The public investment will make a great contribution to the accumulation of fixed assets and current assets, is one of the driving forces for growth that the Government has made a lot of efforts and measures to promote.

In 2023, the Capital plan assigned by the Government to Bac Ninh is VND8,022 billion; The capital plan assigned by the Provincial People’s Council is VND8,238 billion (VND216 billion higher than the capital assigned by the Prime Minister). However, the disbursement of capital in the first 3 months of this year was still slow, reached only 5.4% compared to the Capital plan assigned by the Provincial People’s Council (reached VND447 billion), lower than the national average (10.8%). In fact, there are still many bottlenecks in project implementation and public investment disbursement. The main reason is due to the problems in the site clearance, the determination of resettlement areas and the people want to receive the compensation price higher than the unit price regulated by the State. In particular, there are the cases where some people deliberately do not receive compensation but it is difficult to organize coercion because it needs to be approved by many competent authorities for consideration; some contractors are slow to implement the construction; some projects that are expected to allocate large capital have not yet been approved, some projects have to wait for the Central government’s document... Therefore, the remaining task must be disbursed about VND7,791 billion to ensure 100% disbursement in the remaining months.

Despite many challenges, there is still room to implement measures in order to promote the growth, which is to accelerate the disbursement progress of public investment capital. Therefore, the effective implementation of key public investment projects is a key to growth in both the short time and long term, along with the monetary and fiscal policies to support the economy and ensure the macroeconomic stability effectively.

In order to promote the leading role of public investment in the economic growth, recently at the Conference on solutions to accelerate the disbursement of public investment capital in 2023, the Chairwoman of the Provincial People’s Committee Nguyen Huong Giang directed the sectors, localities and units to strengthen disciplines and rules in disbursing the public investment capital, solving difficulties and obstacles related to land and natural resources. In which, the site clearance and resettlement works are highly concentrated; Build the regulations on coordination of public investment among the departments, branches and agencies, the People’s Committees of the districts, towns and cities on land reclamation, compensation, support and resettlement; Solve the difficulties and obstacles related to the price of construction materials; Accelerate the construction progress and development of modern and synchronous infrastructure systems, important and key works and projects: Ring road 4, Kenh Vang Bridge, Provincial road 295C, Provincial road 285B connect Bac Ninh City through the industrial parks to the new National highway 3; Provincial road 277B connects to Ha Bac 2 bridge; expanding Cau Nga, expanded Hospital of Obstetrics - Pediatrics, roads connecting the concentrated industrial parks; wastewater collection and treatment system and 4 projects under the Socio-economic Recovery and Development Program.

It is also necessary to have solutions to strengthen the driving force for growth of the industrial production and service sectors. Closely monitor developments of the world economy, thereby promptly provide warnings to the business community in order to have appropriate reactions. Promote the market diversification and product diversification to reduce the dependence on traditional markets and products; improve efficiency and well regulate the customs clearance of imports and exports. Continue to step up the substantive improvement of business investment environment, simplify the administrative procedures. Drastically solve major obstacles and barriers for the enterprises at present, especially the procedures related to land and access to capital. Focus on the services that can promote further growth in the industries and fields that still have a lot of room, such as processing, manufacturing, tourism, travel etc.

In fact, in the recent years, the growth rate in the first quarter is usually low, but in the second quarter, it will start to recover and break out in the second half of the year. It is likely that this law will continue to happen in 2023 thanks to the exploitation of new driving forces for growth and the major balances of the economy are secured. Thus, Bac Ninh’s growth target in 2023 (increase 6.5% - 7.0%) will have prospect to be fulfilled.
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