Da Nang is having a wide-ranging economy and its main economic growth driver in recent years has been capital growth. However, what should the city do in order to maintain its growth momentum as its investment attraction has decreased in recent years?

Training high-quality human resources is one of the solutions to contribute to promoting economic growth in depth.

In 2022, despite the reopening of the economy and breakthrough growth after two years of being heavily affected by COVID-19, the domestic and foreign investment attraction in Da Nang still decreased compared to 2021.

The city attracted 33 new domestic and 50 FDI projects, an increase of 6 and 8 against 2021 respectively. It attracted VND13,869 billion and US$70.24 million in domestic and foreign investment capital, accounting for 79.0% and 46.8% of those in 2021 representatively.

The only bright spot in the results of attracting foreign investment in 2022 was that the total capital for share purchase and additional registration reached US$65.09 million, three times higher than that of 2021. In which, share purchase capital accounted for the majority with US$58.51 million.

This shows that foreign investors are turning to the trend of learning and evaluating the business performance of available businesses to make investments in the form of buying shares and contributed capital, thereby helping to shorten time taken for carrying out procedures to ensure that investment efficiency is more feasible.

However, the total newly and additionally registered FDI capital, including contributed capital to purchase shares of the FDI sector in 2022, only reached over US$135 million, equal to about 80% of the figure in 2021.

During the 2018-2022 period, Da Nang's ability to attract FDI tended to decrease. Due to the impact of COVID-19, the access of investors to Da Nang in recent years has been limited; at the same time, the trend of protecting domestic production has increased to encourage production, so the return of FDI inflows was also affected.

However, the sharp decline in investment attraction in Da Nang (especially FDI) in 2022 also came from many internal reasons of the economy. In particular, the planning and investment in construction of industrial parks and industrial clusters were still slow and have not met the actual needs of space and technical infrastructure for investment attraction.

Till date, the city has focused on calling for investment in new industrial parks, so there is not enough space to deploy technical infrastructure while the average annual occupancy rate in the existing industrial parks has been high for many years.

Investment attraction outside industrial parks is also limited because the land fund to call for investment in large-scale projects is still small and some land funds have not yet met the necessary conditions to conduct auctions of land use rights.

Also, the city has been facing many difficulties and obstacles in the process of implementing the conclusions of the inspection, examination, audit, and the Court. Accordingly, many projects have to be suspended, affecting the effectiveness of leadership and direction in the implementation of the city’s socio-economic development tasks as well as investors' psychology.

Therefore, in order to promote investment attraction, aside from unleashing resources, Da Nang needs to take solutions to promote growth in depth through improving the quality of human resources, supporting enterprises to innovate and apply new technologies, and boosting digital transformation, in the coming years.

Reporting by THIEN KIM - Translating by M.DUNG