A new decree on supporting industries development about to come out will not include a VND30-trillion investment fund as previously planned but will provide plenty of policies to back enterprises in these industries.
A new decree on supporting industries development about to come out will not include a VND30-trillion investment fund as previously planned but will provide plenty of policies to back enterprises in these industries.
A source from the Ministry of Industry and Trade told the Daily on October 6 that Government members were commenting on the draft decree and that it would be issued late this month or early next month.
When the draft was tabled for discussion late last year, it mentioned a fund designed to support manufacturing and services projects in supporting industries. Of the VND30 trillion planned for the fund, VND2 trillion would be sourced from the State budget in the initial time.
The technology investment fund is not included in the latest draft that the ministry has presented to the Government for consideration. However, it offers a lot of incentives in terms of capital, technology transfer, research and development, and establishment of industrial parks.
There are nearly 1,400 local producers of components for supporting industries nationwide, not to mention more than 600 producers of materials for the textile-garment sector.
Investments in supporting industries are risky and require a long period of time for capital recovery, thus discouraging investors. Moreover, the capacity of domestic enterprises in supporting industries remains limited.
Therefore, producers in Vietnam rely on material imports and this is one of the reasons behind trade deficit in the manufacturing sector over the years. The import bill of supporting industries was US$53.1 billion in 2013 and shot up to US$67.6 billion last year.
Domestic enterprises are awaiting more supporting measures to improve their performance and invest more in material production, particularly for supporting industries to bank on the opportunities from the Trans-Pacific Partnership (TPP) agreement.
On Monday, Pacific trade ministers reached a deal on the TPP in a generation that will cut trade barriers for the 12 member states.
Truong Thi Chi Binh, director of the Center for Development of Enterprises in Supporting Industries, said textile and garment enterprises would benefit a lot from the TPP when it takes effect. More foreign enterprises will invest in apparel factories in Vietnam to enjoy low or zero tariffs, so it is necessary to formulate policies to promote the development of local firms.
According to the draft decree, a national program for supporting industries and incentive policies would come out. Development centers in support of these industries will be set up in localities and enterprises would be aided in building industrial parks for supporting industries.
Investors of industrial parks for supporting industries would get a land rent exemption for 11 years and a 50% rent cut in the nine following years. Besides, projects in supporting industries would be provided with preferential loans from the investment-development fund or commercial banks.
(Source: SGT)