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VIETNAM ACADEMY OF SOCIAL SCIENCES GRADUATE ACADEMY OF SOCIAL SCIENCES KIM QUANG CHIEU RESTRUCTURING THE AGRICULTURAL ECONOMICS TOWARD MODERNIZATION IN HUNG YEN PROVINCE Major: Development Economics Code: 9.31.01.05 SUMMARY OF ECONOMIC DOTORATE’S THESIS HANOI - 2019 THE THESIS IS COMPLETED AT GRADUATE ACADEMY OF SOCIAL SCIENCES Scientific Advisors: Prof Dr Do Duc Binh Assoc Prof Dr.Dang Thị Phuong Hoa Counter-Argument No.1: Assoc Prof; Dr Ngo Quang Minh Counter-Argument No.2: Assoc Prof; Dr Nguyen Trong Xuan Counter-Argument No.3: Dr Dinh Quang Ty The thesis shall be defensed in front of Institute Examination Board meeting held atAt… Date… Month… …Year 2019 The thesis might be founded at the following labs : - Laboratory - Laboratory INTRODUCTION Rationale FDI companies in industrial zones have made great contributions to socio-economic development of the country FDI enterprises not only bring a supplementary source of capital to total capital of the society, contribute to economic development, increase export turnover, contribute to the national budget revenue but also act as a link between domestic firms and advanced technologies as well as modern management skills from developed contries At the same time, they promote innovative technology, productivity enhancement, business efficiency, create jobs and bring employees a stable income Over the past few years, industrial zones in Hung Yen province with their own advantages and welcoming policies which encourage investment projects into the province by the end of 2016 have attracted 2,800 million USD of FDI capital Although the results of FDI attraction to Hung Yen province are considerably positive, it does not mean that FDI should be accepted at all costs especially in recent years when FDI waves have been coming to Vietnam in general and Hung Yen in particular Instead, FDI attraction should be focused on the investment quality in the way that FDI is strictly chosen with more attention to projects using high technology and clean technology and projects that are able to create competitive products and to participate in the global value chain In addition, policies to attract FDI into industrial zones as well as the government administration of the province have posed several problems FDI attraction has only aimed at quantity and achievements and did not pay attention to benefits in all three aspects: economic, social and environmental To solve the above-mentioned issues, the author chose „FDI attraction for the sustainable development of industrial zones in Hung Yen province’ as the topic for his dissertation Study aims and objectives - Aims of the study Overall, the study aims at examining theoretical and practical issues of FDI attraction for the development of industrial zones in an area and proposing solutions to increase FDI attraction to sustainably develop industrial zones in Hung Yen province - Specific objectives of the study The main objectives of the study are: Systemizing literature of FDI, industrial zones, impacts of FDI on an economy in general and on enterprises inside the industrial zones in particular, sustainable development; Properly assessing the status of FDI attraction to develop industrial zones in Hung Yen province; Giving researching points of view, solutions and proposals to attract FDI in order to sustainably develop industrial zones in the coming years Research subjects and scope - Subjects of the research: Subject of the study is FDI attraction to develop industrial zones of a locality (in three pespectives: economic, social and environmental although more attention is paid to the economic perspective) - Research scope: FDI enterprises in industrial zones in Hung Yen province in a five year period from 2011 to 2016 Methodology - Research and systemize theories: Systemizing the theories of FDI attraction, sustainable development, industrial zones and making assessment and analysis on orienting criteria to promote the development of industrial parks in a sustainable way - Gather and analyze secondary data: The study collect secondary data from government departments, boards, agencies and annual abstracts of statistics of Hung Yen province Synthesized and analysed data can be used to compare Hung Yen industrial zones with those of neighboring province to learn from their experience and mistakes in FDI attraction into industrial zones - Method for primary data collection: The study uses survey questionnaires to collect primary data A survey was conducted in 172 FDI firms in industrial zones in Hung Yen province - Consultation method: The author interviewed with administrators and directors of government department, board and agencies and other experts to give solutions and proposal for the research New contributions of the study - Systemizing and contributing in clarification of several theoretical problems in FDI attraction to develop a locality in sustainable ways - Analyzing, properly and objectively assessing the current status of FDI attraction into industrial zones in Hung Yen province to point out advantages, main results, limitations and their causes, which are the basis for the solutions of the study - Proposing 07 solutions to increase FDI attraction to sustainably develop industrial parks in Hung Yen province by the end of 2025 vision 2030 This is an important basis for the People‟s Committee and other government departments and agencies in the province to consider when issuing investment policies and solutions in order to attract FDI in the coming years Structure of the study Apart from the introduction and the conclusion, the dissertation consists of chapters: Chapter 1: Literature review on FDI attraction for the sustainable development of industrial zones Chapter 2: Theoretical and practical basis for foreign direct investment attraction to sustainably develop industrial zones of a locality Chapter 3: Current status of FDI attraction for the sustainable development of industrial zones in Hung Yen province Chapter 4: Points of view and solutions to attract FDI in order to sustainably develop industrial zones in Hung Yen province by the end of 2025 vision 2030 Chapter 1: LITERATURE REVIEW ON FOREIGN DIRECT INVESTMENT ATTRACTION FOR THE SUSTAINABLE DEVELOPMENT OF INDUSTRIAL ZONES 1.1 International studies Research by Alexis, Pafait, Normand (2015) The authors proposed a comprehensive model of FDI attraction with two basic elements: multinationals and host countries and analyzed Canada‟s FDI attraction techniques: Excellent investor program; investment promotion tools and post-investment services Study by Lix Liu (2005) The researchers drew the following conclusion: FDI itself not only directly but also indirectly boosts economic growth via its interacting relationships Research by Xiaohui Liu, Chang Shu, Peter Sinclair (2009) the authors found a cause and effect relationship among FDI, trade, emerging and M&A acquisition and economic growth in most Asian nations Study by Adam P Balcerzak, Mirosława Żurek (2011) The authors found that there is an interdependent relationship between FDI and the labour market in the long term and that increase in FDI can lead to a reduction of unemployment Encouraging the inflows of FDI can create positive influences on the market in the long run 1.2 Domestic studies Do Duc Binh (2013) The researcher focused on clarifying major shortcomings and weaknesses in FDI attraction in Vietnam and suggested a number of orientation solutions to improve the efficiency of FDI attraction Do Duc Binh et al (2014) The study outlined the factors influencing FDI attraction to develop the economy, assessed the current status of FDI attraction into the Northern mountainous midland provinces to give their scientific views and solutions to attract FDI for sustainable economic development However, the research was only engaged in the analysis and evaluation of FDI attraction for economic development but not considered the impacts of FDI in the perspectives of environmental and social issues Nguyen Mai (2013) The researcher examined the impacts of FDI on economic growth in both scale and quality According to the author, FDI has positive effects on economic growth via investment channels on a national level Nguyen Thi Tue Anh et al (2006) The authors conducted quantitative analysis to evaluate the impacts of FDI on economic growth via capital asset acquisition and assess the spillover effect of FDI on companies The researchers claimed that FDI has positively contributed to the economic growth in Vietnam and the amount of contribution has jumped since Vietnam officially integrated into the global economy Study by Pham Thi Tuyet Nhung (2013) The researcher evaluated the relationship between FDI into Hung Yen province and indicators: Gross regional product; Labor; Tax and Export The researching results show that FDI has an impact on gross regional product in the first three years and on labor, import and tax in the first two years Study by Do Minh Tri, Bui Bang Doan (2013) The researchers pointed out causes, limitations of investment attraction in Hung Yen province, proposed solutions to boost investment attraction as well as to take advantage of its own strengths to establish and improve competitive ability of Hung Yen province in the future Do Thi Hoa Lien (2016) The author analyzed and assessed the current status of industrial development in Hung Yen province Based orientation and the status of industrial development in Hung Yen province, the researcher proposed major solutions to policies for the industrial development in Hung Yen province 1.3 Gaps to continue research 1.3.1 Theoretical gaps So far there has no research thoroughly and systematically examining and interpreting the literature of FDI attraction to develop industrial zones in a particular local area in sustainable ways 1.3.2 Practical gaps: Up to now, there has been little research examining simultaneously factors effecting FDI attraction and the impacts of each type of FDI on sustainable development in a particular economic area, especially industrial zones in Hung Yen province Chapter 2: THEORETICAL AND PRACTICAL BASIS FOR FOREIGN DIRECT INVESTMENT ATTRACTION TO SUSTAINABLY DEVELOP INDUSTRIAL ZONES OF A LOCALITY 2.1 Concepts and theories of FDI 2.1.1 Concepts of FDI FDI is an investment from a foreign investor to transfer currency, assets, technology … from one country to the host country and hold ownership, management and administration of an economic unit in order to gain economic benefits from the host country Attracting FDI into a locality is the application of measures and policies so that FDI investors come to invest directly in different approaches in accordance with the common interests of the host locality and the foreign investors 2.1.2 Theories of FDI - Theory of international trade - Theory of industrial organization or monopoly advantage - Theory of product life cycle 2.2 An overview of industrial zone 2.2.1 Concept and classification of industrial zone 2.2.1.1 Concept of industrial zone An industrial zone is a part of a nation’s territory that is clearly defined with geographical boundaries and appropriate infrastructure constructed for the purpose of manufacturing industrial products and providing services An industrial zone must be established by the government or under the permission of the government in accordance with the laws, without residents living inside 2.3.1.2 Classification of industrial zones According to the scope and regulated subjects of Decree 29/2008/ND-CP dated March 14, 2008, industrial zones consists of two categories: traditional industrial zones and export processing zones which specialize in producing export goods, providing services for exports and export activities with defined geographical boundaries and are established under legal conditions and procedures for industrial parks 2.3.2 Requirements for developing local industrial zones Industrial zones contribute to accelerate the industrialization and modernization process of the nation - Industrial parks play an important role in changing economic structure in a positive way - Industrial zones help to develop various types of services - Industrial zones help to restructure the workforce in favor of non-agricultural labor, create new jobs and develop local human resources - Industrial zones accelerate the modernization of infrastructure and increase the rate of the urbanization process - Industrial zones promote global economic integration - Establishment of industrial zones does not germinate social problems affecting the local community where industrial zones are located - Development of industrial zones does not have negative effects on the environment 2.3 Factors affecting FDI attraction into a locality 2.2.1 Group of national factors 2.2.1.1 Strategies for capital attraction to develop the national socioeconomy - How open the economy is - The stability of social and political environment - The stability of economic environment - The national legal system 2.2.2 Group of factors belonging to local government - Perception of leaders at all levels is related to FDI attraction into the locality - Plans for infrastructure development of local industrial zones - Comparative advantages of the locality 2.2.2 Group of factors belonging to enterprises inside the industrial zone - Investment strategies of foreign investors - Financial capacity of enterprises in the industrial zone - Science, technology and management capability of enterprises - Quality of organizational human resources in industrial zones 2.3 FDI attraction for the sustainable development of industrial zones 2.3.1 Concept of sustainable development of industrial zones Sustainable development of industrial parks is the development of enterprises and industrial parks themselves where the three major objectives are harmoniously combined: economic growth, social development, environmental preservation and protection in the industrial parks and spreading positive effects outside the industrial parks 2.3.2 Concept of FDI attraction for the sustainable development of industrial zones According to the researcher, FDI attraction for the sustainable development of industrial zones is application of measures and policies for the FDI investors to invest in industrial zones under different forms in accordance with general interests of the locality which receives the investment with positive impacts on the development of companies and industrial zones and the harmonious combination of three major objectives: economic growth, social development, environmental preservation and protection in industrial zones and spreading positive effects outside industrial zones 2.3.3 Requirements for FDI attraction to the sustainably develop local industrial zones - FDI attraction into industrial zones must be based on three perspectives: economic, social and environmental development - FDI must be in line with the development planning of industrial zones in the locality receiving investment - FDI attraction to develop industrial zones should promote the potential and advantages of the locality - FDI projects must strictly follow the regulations and legal system of the host country and the locality - FDI projects in industrial zones must have positive spreading impacts on enterprises operating in other sectors and fields outside industrial zones - FDI projects in industrial zones must use advanced technology and establish plans for technological improvement and innovation and implement such plans during the operation process - FDI projects operating in industrial zones must have periodic employee training grograms - FDI enterprises‟ code of behavior must be consistent with local standards and international practices 2.4 Some criteria to evaluate FDI attraction for the sustainable development of industrial zones No Criteria Current status of FDI attraction into industrial zones in Hung I Yen province Current number of registered and implemented FDI Current number of FDI projects Current scope of FDI projects Current status of investment forms and partners Current status of invested industries Evaluation of the current status of FDI attraction for the II sustainable development of Hung Yen province Criteria for assessing FDI attraction for the economic development of industrial zones 1.1 Criteria for assessing internal economic status of industrial zones Evaluation of investment scale Operational efficiency of FDI enterprises in industrial zones Satisfaction level of investors Ability to connect between enterprises in industrial zones 1.2 Criteria for assessing the spreading economic effects of industrial zones Contribution level to export value Level of contribution to industrial production value Level of contribution to provincial budget Ability to boost economic growth Level of contribution to labor productivity increase Criteria for evaluating FDI attraction for the social development of industrial zones 2.1 Criteria for assessing the sustainability level of the environment inside the industrial zones Relationship between employers and employees Capacity to create jobs for the locality Increase in employees’ income 2.2 Criteria for assessing the sustainability level of the environment 10 technology and meet the requirements for economic development in the province 3.2 An overview of foreign direct investment in industrial zones in Hung Yen province Scale and filling rate N o Name of industrial zone Plan ned area Pho Noi A Det may PN Thang Long II Minh Đuc 596.4 121.8 345.2 198 Area for rent 2014 422 92.8 257 136 2015 422 92.8 257 136 Area leased 2016 422 92.8 257 136 2014 276 22.8 150 38.4 2015 289 39.5 174 39.8 2016 316 49.2 213 39.8 Filling rate (%) 2014 65.6 24.6 58.3 28.3 2015 68.5 42.6 67.6 29.3 2016 75.0 53.0 82.9 29.3 Number of foreign direct investment enterprises Số lượng DN FDI vào KCN từ năm 2008 200 150 100 50 s ố DN FDI Trước 2008 2008 2009 2010 2011 2012 2013 2014 2015 2016 29 43 46 56 72 89 103 129 144 172 In 2008, in the all the industrial zones of the whole province, there were 99 enterprises, including 70 domestic companies and 29 FDI firms, which accounted for 29% of enterprises in industrial zones After 10 years of operation, the number of enterprises in the industrial zones of the province has reached 310, including 138 domestic companies and 172 FDI companies, presenting 55% of enterprises in all the industrial zones A mount of direct investment attracted Số vốn FDI vào KCN từ năm 2008 3.000.000 2.500.000 2.000.000 1.500.000 1.000.000 500.000 - Số vốn FDI Trước 2008 2008 356.550 977.004 2009 2010 2011 2012 2013 2014 2015 2016 1.033.56 1.227.26 1.586.71 1.807.90 1.932.19 2.299.44 2.506.03 2.800.02 In 2003, there were 10 FDI companies in the provincial industrial zones with a registered capital amount of 75,702 million 11 USD By 2015, the number of projects rose to 262, including 144 FDI projects with total registered capital of 2,506 million USD During 2016, 28 FDI firms were newly registered with total registered capital of 293.9 million USD, the increase in the capital of 24 FDI projects were approved with total increased capital of 78.4 million USD 3.3 Current status of FDI attraction into industrial zones in Hung Yen province in sustainable ways 3.3.1 Current status of FDI attraction into industrial zones FDI attracted by the amount of registered and implemented capital During the period from 2006 to 2016, the amount of registered capital rose by 37 times, from 75,702 million USD to 2,800,019 USD in 2016, especially in only years from 2014 to 2016 the amount of registered capital reached 867,822 million USD, accounting for 31% of total capital registered by 2016 Criteria for attracting FDI into industrial zones by the number of projects Before 2008, there were only 29 FDI projects in all the industrial zones of the province After 10 years, the number increased to 172 FDI projects by 2016 (up 5.9 times compared to that before 2008), the average increase rate is 22.3% compared to the previous year Criteria for FDI attraction into industrial zones by scale of the projects Year Numbe r of enterpr ises A (1) Numbe r of ongoing enterpr ises (2) Area leased (hectare) (3) Average FDI capital per project (million USD) (7)=(4)/(1) Average FDI capital per hectare (million USD) (8)=(4)/(3) 2011 2012 2013 2014 2015 2016 72 89 103 129 60 77 94 111 12 199,85 214,69 221,34 256,77 18,90 18,68 16,96 16,89 6,81 7,74 7,89 8,49 144 172 132 145 283,1 341,41 17,43 16,28 8,86 8,20 The results of attracting FDI enterprises into industrial parks in the province have been relatively stable, about 18 projects per year Besides, the amount of FDI attracted has been also stable, above 16 million USD per project Thang Long II industrial park has the highest average amount of invested capital, reaching approximately 25.8 million USD per project while the figure for Minh Duc industrial park is only 1.7 million USD per project With the stable amount FDI attracted per hectare over the past years, the figure for all industrial zones in the region was million USD per hectare The figure for Thang Long II was the highest among all industrial parks (0.06 million USD per hectare) while the figure for Minh Duc was only million USD per hectare During the period between 2006 and 2010, with “spreading red carpet” policies to welcome foreign investors, industrial parks in Hung Yen have become the ideal destination for foreign investors Total registered capital for this period was 1.115 million USD, up 4.7 times compared to 2000-2005 period The period from 2011 to 2015 continued to attract 88 more FDI enterprises with total registered capital of 1,148.18 million USD In the other hand, implemented capital has followed a downward trend in recent years, especially in 2016, when this number was only 68.7% and the scale of capital was small, 10.39 million USD per enterprise in comparison with 13 million USD per FDI enterprise in the whole country In addition, there is a large number of small sized projects like Glory Labelvina limited company with the registered capital of 0.13 million USD and a considerable number of FDI projects did not have financial capacity to hire land and build factories but have to rent workshops to manufacture their products FDI attracted into industrial zones by investment forms and partners 13 With investment structure dependent on investment partners and most of projects come from Japan (96 projects with total capital of 1,985,216 million USD or 20,466 million USD per project), Thang Long II industrial park mainly attracts Japanese investment projects The number of Japanese projects is 72 out of 77 projects in the entire industrial park FDI attracted into industrial parks by invested fields Co-operation activities in production Although FDI attraction in developing industrial parks in the province has constructive influences on the economic connection between FDI enterprises and the provincial economy and among FDI companies themselves, these influences have not been as good as expected The companies only make use of low-cost labor and majority of the workers‟ jobs involve indirectly controlling the technology chain Moreover, these enterprises are oriented to focus on export or importing inputs, processing then exporting the outputs to gain high profit margin 14 In the past years the level of connection between FDI firms and the local enterprises has been very limited, the influence and spreading power of FDI firms has still been inadequate - Evaluation of invested capital scale By the end of 2016, there were 396 ongoing valid FDI enterprises in the whole province with total registered capital of 3,610.56 million USD Total valid FDI enterprises in the provincial industrial zones by the end of 2016 were 172 with total capital of 2,008.02 million USD Although the number of projects in industrial zones only accounted for 43.4% of all enterprises in the province, their proportion of registered capital was 55.6% Among all industrial parks in the province, Thang Long II industrial park has the largest number of FDI projects, representing 44.8%, but its amount of capital accounted for 66% of the industrial park and 51.2% of the whole province In comparison with domestic companies in the industrial park, the number of FDI companies made up 55.5% of total companies in the industrial park However the percentage of their capital was about 80% of total capital of the entire industrial park 3.2.1.2 Criteria for evaluating spreading economic effects of industrial zones - Evaluation of export value The export value of FDI enterprises in industrial zones in Hung Yen province accounts for 70% and their annual growth rate was relatively steady However these figures were not remarkable because FDI enterprises always had a large proportion of export value, at 89.8% Compared with the amount of capital of FDI companies in the province, the figure for FDI companies was 55.6% of the whole province but export value accounted for 89.9% This means FDI enterprises in industrial zones operated more efficiently In addition, the export value increase rate of FDI firms in the whole province was only 32.8% on average while that of FDI firms in industrial zones was 47.5% 15 Assessment of industrial production value The amount and proportion of industrial production value and the growth rate of FDI enterprises in industrial parks often reached great value In the following years, the annual growth rate slowed down but still accounted for 27% of the whole province Assessment of contribution to the provincial budget Although the proportion of contributions of FDI enterprises in the industrial zones to provincial budget was high compared to that of FDI firms in the whole province, the contributions of all enterprises in industrial parks in general and FDI enterprises in industrial parks in particular to the provincial budget still represented a small percentage Assessment of contribution to the economic growth 16 In 2010, GDP of the whole province was 25,675.28 billion VND, with annual increase rate was 12.95% a year By 2015, the provincial GDP reached 47,053.91 billion VND The growth rate of the provincial GDP in 2015 was 145.9% compared with 2010 and this rate was relatively steady over years Similarly, the proportion of GDP of FDI sector in 2010 was 2,465.17 billion VND, only accounting for 9.6% compared to the whole province This figure for 2015 was 6.964,77 billion VND, accounting for 14.8% of the whole province However, the contribution of FDI sector was still considerably small compared to that of other sectors in the whole province Consideration of the structure of gross product Although FDI enterprises in the provincial industrial parks had a limited contribution to GDP of the province, these firms made a great contribution to the economic growth rate and the economic restructuring of the province In comparison to the product restructuring of Bac Ninh province and Hai Duong province, the proportion of gross product of the industry of Hung Yen was the lowest while the figure for Bac Ninh province was 92.2% in 2016, increasing by 15.8% from 2010 to 2016, and that of Hai Duong province was 68.9%, increasing by 6.4% compared to 2010 17 In perspective of impacts of industrial zones on the economic structure of the province, the provincial economy did grow and have positive changes in recent years although this was not adequate for the potential and advantages of the province Evaluation of contributions to increase labor productivity Compared with the average labor productivity of the whole province, the average labor productivity of FDI companies was still lower, at 208.44 million VND per person a year The labor productivity increase rate from 2011 to 2016 was also smaller compared to that of the whole province, at 4% Although labor productivity of FDI enterprises increased, the value and the increase rate was not higher that that of the whole province This means that FDI enterprises hired a great number of unskilled and low technological skill workers In comparison with working productivity of other other neighboring province with similar conditions, it showed that there was a rise in working productitivy of Hung Yen province although the rise was inadequate for its advantages The figure only increased by 91.68 million VND in a five year period and the increase rate was not steady, peaking at 597.67 million per person a year in 2013 3.2.2 Criteria for evaluating the social sustainability of industrial parks Relationship between employers and employees Work pressure of time and working intensity led to the fact that a number of workers made mistakes in their work or failed to fulfill their task and then had a salary deduction or was fired, some workers had voluntary resignation Moreover, there have been complaints and workers stopped work as a strike in the industrial parks All of the cases were belong to FDI enterprises This has made a destructive impact on the process of resolving conflicts arising in the field of rights and benefits of employees and negative impacts on business 18 operation of the enterprises and the sustainable development of the province in social aspect - Creation of jobs and income for employees in the industrial parks + Creation of jobs In the whole province, there was 2,631 ongoing enterprises with 153,596 workers while the number of enterprises in industrial parks was only 310, accounting for 11.8%, the number of employees was 42,500, accounting for 27.7% This shows industrial zones have attracted a great number of workers in the province the number of FDI companies in industrial parks was only 172, accounting for 6.5% of the whole province while there were 30,114 employees working in those companies, accounting for 70.9% of the industrial zones or 19.6% of the whole province + Evaluation of employees’ income FDI enterprises had higher per capita income than domestic enterprises in the industrial parks - Evaluation of labor structure by sector Labor structure by sector of the province fluctuated considerably over the past years Although workers in agriculture sector fell, there was also a drop in the number of workers in industry sector Workforce in the industrial zones only had minor positive impacts on industrial economic structure and moderate impacts on industrial structure of the province - Evaluation of improvement in local people’s life The data collected from a survey of residents‟ living standards showed that the proportion of poor families has declined Per capita income of the province rose 1.5 times from 2010 to 2015 In 2011, per capita income was 1,590 million VND per month This reached 2,352 million VND per month in 2015 3.2.3 Criteria for evaluation of environmental sustainability of industrial parks - Evaluation of the scale and quality of wastewater from industrial parks + Evaluation of the scale of wastewater With the number of ongoing companies was 255 out of 310, the total amount of wastewater (including domestic wastewater and industrial wastewater) was approximately 25,407 m3 a day + Evaluation of the quality of wastewater 19 Indicators of treated wastewater peaked in 2014 although those indicators did not exceed the allowable limits before the wastewater was discharged to the outside environment and there was an increase in the volume of production This means wastewater treatment system of the enterprises functioned well, meeting the efficiency requirements for wastewater treatment - Criteria for evaluating solid waste from industrial parks Up to now, all industrial parks have not established their planning for the construction of a centralized waste treatment system, the industrial parks themselves did not have a optimum measure Companies temporarily kept their own waste and signed contracts with collection units themselves to collect and process the waste Therefore, the problem of solid waste treatment, especially harmful waste need a more rigorous control system to be thoroughly solved to avoid negative impacts on the environment and the sustainable development of industrial parks - Criteria for air and noise treatment in industrial parks In general, the quality of air environment in the industrial zones was relatively stable Levels of indicators in the atmosphere in industrial zones were still with allowable limits 3.3 General evaluation of FDI attraction to sustainably develop industrial parks in Hung Yen province 3.3.1 Limitations From economic perspective First, FDI projects into industrial parks in Hung Yen province had unequal and unstable capital scale Second, capital structure of FDI attracted into industrial zones in Hung Yen province was unbalanced Third, there were no large projects investing in technical infrastructure to create revolutionary breakthroughs when the infrastructure of the industrial zones has hindered investors in their business activities Fourth, shift in economic structure has not been created Fifth, there has not been a remarkable change in technology transfer and endogenous technological capacity Sixth, supporting industries have not been a driving force in the industrial development of the province From social perspective 20 First, the contribution of FDI enterprises to social development in Hung yen was small Second, human resource has not been developed to adapt to the requirements for sustainable development of industrial zones From environmental perspective First, the unbalanced attention to the relationship between FDI attraction and environment protection Second, there was no thorough treatment of hazardous waste and solid waste Third, environmental monitoring activities were not taken thoroughly 3.3.2 Causes of the limitations - Limited understanding about developing industrial zones - Inadequate technical infrastructure system - Some requirements from FDI enterprises have not been met - Inefficient promotion activities for FDI attraction - Attetion has not been paid to supervision of FDI attraction into industrial parks - Low quality workforce and ineffective government and local management for FDI Chapter SOLUTIONS FOR FOREIGN DIRECT INVESTMENT TO SUSTAINABLY DEVELOP INDUSTRIAL ZONES IN HUNG YEN PROVINCE BY 2025 VISION 2030 4.1 Orientation and viewpoints about increase FDI attraction to sustainably develop industrial parks in Hung Yen province - FDI attraction to develop industrial zones should be adequate for the advantages and potential of Hung Yen province - To attract FDI into industrial zones in a sustainable way, enterprises in industrial parks should be oriented to environmental friendly production - FDI companies with high technology and FDI companies with large added value and ability to create a great number of jobs for the locals should be encouraged - In order to sustainably develop industrial zones, priority should be put on production projects which can create preading effects on other enterprises inside industrial zones and among enterprises 4.2 Points of view about FDI attraction to sustainably develop industrial parks in Hung Yen province - FDI attraction to sustainably develop industrial parks in the 21 province must ensure the sustainability in all three aspects: economy, society and especially environment - FDI attraction to sustainably develop industrial zones in the province must have a selective orientation - The admistration and management must be transparent and systematic to creat trust and liability for investors - FDI attraction to sustainably develop industrial zones in the province should be focused on investment effectiveness FDI attraction to develop industrial zones must not be exchanged for the destruction of the environment, unstable politics and society - All mechanism and policies related to FDI attraction to develop industrial zones should ensure long-term benefits of the parties involved - Development of industrial zones must go hand in hand with improving local people‟s social life where the industrial zones are located, especially the people directly affected by land acquisition for the construction of industrial parks Development of industrial parks must be associated with solutions to create jobs and improve the life of the people living in the area - FDI attraction to develop industrial parks should be associated with strengthening and improving the efficiency and effectiveness of government administration system for industrial zones 4.3 Solutions to increase FDi attraction to sustainably develop industrial zones in Hung Yen province by 2025 vision 2030 4.3.1 Substantial change in understanding of FDI attraction to sustainably develop industrial zones Economic regulating policies should be aimed at sustainable development Issuance of policies must be systematic in viewpoint, orientation but flexible and sensitive to the reality of socio-economic development In fact, understanding and perception of viewpoints, regulations and policies encouring FDI attraction is still limited Therefore: - Filling rate need to increase to 100% for the three ongoing industrial zones so that their operation is increasingly effective, substantially benefiting industrial zones themselves and the province of Hung Yen - The quality of FDI attraction into industrial parks should be improved in a sustainable way - There should be employee training policies and policies to 22 attract local human resource to work for FDI enterprises - Policies to attract FDI and use FDI must be inline with the strategic goal and create equality between FDI and domestic enterprises in the province 4.3.2 Completing the planning of infrastructure and develop infrastructure for FDI attraction to sustainably develop industrial zones - Concentrating on building infrastructure inside approved industrial zones to create equality among foreign and domestic project invested in industrial zones - Planned policies to develop sectors and industries must create the connection among regions and sectors such as supply of material, workers in industrial zones - Priority must be put on enterprises located inside industrial zones This would be a great advantage to help industries develop, creating convenience in labor management and ensuring services to meet the need of workers‟ lives - Constructing infrastructure outside industrial zones such as feeder road system, rational highways, provincial roads, inter-distric and commune roads - Establishing plans to attract enterprises into industrial zones 4.3.3 Completing the mechanism, policies and administrative procedures for FDI attraction into industrial zones - Policies for FDI attraction to develop industrial zones must be considered for the consistency in the long term - Concentrating on comprehensive review of administrative procedures in all fields, promptly gathering uniformly necessary steps in the book of administrative procedure issued for the province - Reducing tax preferential policies to encourage supporting industries which manufacture high added value products using modern technology and biotechnology… - Discipline must be strengthened in order to increase the responsibility of government officers directly dealing with administrative procedures related to appraisal and monitoring of FDI projects in industrial zones - Conducting periodic supervision and investigation of FDI projects‟ observance of environmental, waste and food safety laws - Concentrating on improving and enhancing managing skills and professional skills in environment protection for officers in provincial agencies - Rigorous and careful approval of FDI projects are needed to 23 attract high and clean technology projects for the sustainable development - Supporting approved FDI projects 4.3.5 Strengthening investment promoting and supporting activities to attract FDI to sustainably develop industrial zones - Renew approaches and programs for investment promotion on a regular basis - Based on bilateral agreements among countries, appropriate policies for promoting investment should be issued to make use FDI inflows from other countries and potential partners taking part in aggreements - Implementing programs to promote business environment in Hung Yen in several popular reliable international media channels combined with programs to promote trade,tourism and the provincial images - Chosing investment promoting tools such as conferences on investment opportunities, advertising, campaigns, Internet … to convey positive messages to investors - establishing representative offices and investment promoting centers in targeted countries such as the United States, EU countries and other developed countries in order to develop industrial parks in a sustainable way 4.3.6 Enhancing management efficiency of the province and the management board of the industrial zones to sustainably develop industrial zones - Investment activities and FDI projects must be carefully managed, monitored and investigated in accordance with the laws - Holding regular talks, seminars to communicate with FDI companies to promptly answer and handle difficulties in the process of implementing prolicies - Technology advancement, information and technology tranferance must be periodically assessed and monitored to perform the inspection and supervision functions of FDI projects on machinery, equipment, production line and technolody transference - It is necessary to develop model policies for the management board in industrial zones to promote the “one door, on the spot” mechanism which is both open and tight - Holding regular meetings with FDI enterprises to receive their feedback 24 4.3.7 Developing human resource to meet the requirements of developing industrial parks in a sustainable way - Reviewing human resource needs and fields of FDI needing labor - Strengthening the relationship between training institutions with employers to continue to ensure the quality of human resources in the market - Encouraging FDI enterprises by policies for establishing research and development, training funds to attract skilled and qualified workers who are able to quickly learn technology transfered, and increase the quality of local human resource CONCLUSION The study presented theoretical issues on FDI attraction for the sustainable development The study examined current status of FDI attraction to sustainably develop industrial zones in Hung Yen province to emphasize the results achieved, limitatins as well as the problems posing in attracting and using FDI effectively to develop sosio-economy of Hung Yen province in a sustainable way The study repsents prospects in FDI attraction into Hung Yen province in general and into industrial parks in particular; viewpoints and orientations for FDI attraction to develop industrial zones in Hung Yen province by 2025, as well as proposes some solutions to attract quality FDI into Hung Yen in the future These solutions are mainly for government agencies at national level to focus on major groups to increase FDI attraction to sustainably develop industrial parks in Hung Yen Hopefully, the findings of the research will practically contribute to the planning of policy on attracting quality FDI into Hung Yen province in the coming years However, with limited research ability and limited time, the research still has certain shortcomings The author hopes to receive valuable comments from scientists, other researchers, managers from enterprises to continue to improve the topic ... locality and the foreign investors 2.1.2 Theories of FDI - Theory of international trade - Theory of industrial organization or monopoly advantage - Theory of product life cycle 2.2 An overview... a five year period from 2011 to 2016 Methodology - Research and systemize theories: Systemizing the theories of FDI attraction, sustainable development, industrial zones and making assessment... clarification of several theoretical problems in FDI attraction to develop a locality in sustainable ways - Analyzing, properly and objectively assessing the current status of FDI attraction into industrial