HCMC facing tough challenges developing export processing, industrial zones

SGGP

Ho Chi Minh City has been able to attract much investment and offer jobs for millions of laborers during its 30 years trying to establish and develop export processing zones and industrial parks (EPZ-IPs). However, along with the urbanization process, these EPZ-IPs have gradually shown inadequacies in infrastructure planning that need addressing for a more sustainable growth.

HCMC facing tough challenges developing export processing, industrial zones ảnh 1 Laborers of Tan Tao Industrial Park coming back home after a working day


The West of HCMC accommodates the industrial parks of Le Minh Xuan, An Ha, Tan Tao, Tan Binh, and Vinh Loc. The last two of them, established in 1997, are less than 2 kilometers away from each other, and are the workplaces of nearly 50,000 workers.

At the beginning, Tan Binh and Vinh Loc Industrial Parks were sited in scattered residential areas, but after a quarter of a century, both are now surrounded by houses after houses. In addition, to answer the needs of workers here, unregistered street markets have been formed on various roads around the two parks, operating from 4:30pm to 6:00pm each day. That has led to disordered and unsafe traffic situations, not to mention unsanitary food.

The hottest of all traffic disorder in EPZ-Ips happens in Tan Tao Industrial Park in Binh Tan District. Having a surface area of 443ha, this park is the home for 200 businesses with 24,000 laborers in different fields of textiles, precision mechanics, paper packaging, plastic packaging, wood processing, seafood processing. Even with a newly built underpass for pedestrians, at peak hours each day, local residents and passersby are still scared of the overcrowded quantity of workers in and out the park, some of whom do not care about traffic safety at all. Plus, unregistered street markets to serve those laborers each 5:00pm have greatly annoyed other people.

The transportation of materials and end-products to and fro EPZ-IPs might also cause traffic congestion, especially during rush hours. It has become a bad habit on Truong Chinh Street passing Tan Binh Industrial Park, on the entry path to Vinh Loc Industrial Park.

Facing a similar state is the South of HCMC, where Tan Thuan Export Processing Zone and Hiep Phuoc Industrial Park are in operation. Being the first in HCMC, Tan Thuan Export Processing Zone now have 60,000 workers. From 4:30pm to 6:00pm every day, the entry path to this zone as well as surrounding streets of Nguyen Tat Thanh (District 4), Nguyen Van Linh (District 7) witnesses serious traffic jams, even though they have 10 lanes for vehicles to move.

HCMC facing tough challenges developing export processing, industrial zones ảnh 2 Laborers of Tan Tao Industrial Park are buying food at one unregistered street market before coming back home after a working day
The HCMC Export Processing Zone and Industrial Park Authority (HEPZA) stated that the advantageous conditions of the city to attract investment in EPZ-IPs have decreased compared to neighboring provinces. Some of the major reasons are outdated infrastructure, serious urban flooding, and low-quality accommodation for workers.

Another problem worth mentioning is environment pollution, caused by the use of out-of-date technologies among manufacturers in EPZ-IPs in HCMC. This has become a formidable obstacle to those wishing to invest in green projects to enjoy many global free trade agreements.

Finally, industrial production activities in HCMC are facing the challenge of tardiness in launching new industrial park establishment projects, also contributing to the low investment attraction rate in the near future.

Until June 2022, There are 17/20 operating EPZ-IPs in HCMC with over 1,600 investment projects, having a total registered capital of more than US$12 billion and offering jobs for over 280,000 laborers. The surface area for rent reaches 1,832.41ha/2,539.06ha of industrial land, accounting for 72 percent.

Most EPZ-IPs have been working since 1990 with the goal of attracting FDI capital for export activities to become the foundation for the national economy to integrate with the world. Being the pioneers in the country, EZ-IPs in HCMC are always the leaders in terms of growth rates and attractiveness to businesses of all fields.

By Van Dieu, Lac Phong – Translated by Yen Nhi

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