Modernization of the coastal region to quickly the economic property of thanh hoa province

Nội dung text: Modernization of the coastal region to quickly the economic property of thanh hoa province

1. MODERNIZATION OF THE COASTAL REGION TO QUICKLY THE ECONOMIC PROPERTY OF THANH HOA PROVINCE Assoc. Prof. Ngo Thang Loi – MA. Trinh Ha Hoang Linh Abstract: Thanh Hoa has great potential for prosperity. In 2020, Thanh Hoa province ranked 3rd in terms of population (just behind Hanoi and Ho Chi Minh City) but the GRDP/ person was only about 82% of the average GDP/ person of the country, meanwhile The poverty rate was higher than the national average (5.84/5.7%). The government of Thanh Hoa province had a policy of attracting FDI strongly to accelerate the economy, but for many years, the province's economy did not make a breakthrough as expected. In fact, Thanh Hoa has great potential to develop a deep–water seaport in association with marine economy, marine tourism, logistics, and needs to be exploited to hope for a breakthrough. Facing such a situation, the author wants to present some theoretical issues, current situation and development orientation of the coastal area of this province to contribute to the prosperity of a potential rich province like Thanh Hoa. Keywords: Coastal area, modern, efficient, sustainable development. 1. PREAMBLE Thanh Hoa had great potential for prosperity. In 2020, Thanh Hoa province ranked third in population (just behind Hanoi and Ho Chi Minh City), but the GRDP/person is only about 82% of the national average, turnover value. Export per capita was only about 38% of the national average, while the poverty rate was higher than the national average (5.84/5.7% of the general population). The government of Thanh Hoa province had a policy of attracting FDI strongly for socio–economic development, the Politburo of the Communist Party of Vietnam also issued a Resolution on the socio– economic development orientation of Thanh Hoa province to 2045 (2020), but the province's economy did not make a breakthrough as expected. There are many reasons, but the author of this article wants to mention a hidden reason that is, Thanh Hoa has great potential to develop deep–water ports in association with marine economy, marine tourism, logistics, industry connecting to the seaport but has not been exploited effectively. To overcome this situation, hope to make a breakthrough. Facing such a situation, the author wants to present some theoretical issues, analyze the current situation and propose the development orientation of the coastal area of this province to contribute to the prosperity of a potential rich province like Thanh Hoa. 2. GENERALIZING SOME THEORETICAL ISSUES 2.1. Modern coastal area of a province Both theory and practice show that modernization of coastal areas is understood as modernization of industries and fields as well as economic, social activities and management of coastal development. The modernization of an area cannot be done overnight but must be done step by step. Modernization of the coastal area of a province has an important nature in changing the quantity and quality of socio– economic, environmental – security and defense activities of the coastal area to be more and more modern (has more modern technology, a more modern development management and development level), so the development process is more efficient and sustainable, thus improving people's lives, making more contributions. for the general development of the province, region and the whole country. To be more specific, the modernization of the coastal area of a province implies: i) to make the 557
2. industries and fields more modern (increase fields, enterprises use modern technology; changing numbers and the digital economy occupies the main position); ii) Making territories and urban centers more modern; iii) Make the technical infrastructure system more modern; iv) protecting the environment with more modern technology and v) Making the management and development of the coastal area more modern, in which online public services develop at a high level. 2.2. Managing coastal development of a province towards modernization Every development process that wants to be successful must manage it well. The author of the thesis would like to present an overview of the content of state management for coastal development including: (1). The responsible management agency issues and organizes the implementation of the master plan and plans for coastal development. Specifically, organizing the formulation and approval of the project on socio–economic development planning of coastal areas of the province for a long–term with scientific basis; (2). The responsible management agency concretizes the laws and policies of the State; issue and organize the implementation of specific policies for coastal development in order to ensure that the planning objectives and directions are successfully implemented; (3). The responsible management agency conducts inspection, examination and supervision of the implementation of development activities in coastal areas, especially development investment activities. At the same time, control risks in the process of regional development; (4). Regulatory agencies responsible for organizing investment promotion (especially well preparation of conditions such as setting up projects calling for investment, investment incentive policies, organizing investment promotion), promoting image and opening inter–regional, inter–provincial and foreign cooperation conferences; (5). The responsible management agency organizes the evaluation of the results and effectiveness of coastal development as well as the effectiveness and efficiency of state management in coastal areas. 2.3. The important factors influencing the modernization of the coastal area There are many factors influencing the modernization of the coastal area and ensuring the sustainable development of the coastal area [4] but the author wants to emphasize the following important factors: – Profitability for investors, state and people's interests. Coastal development requires a lot of investment capital. Capital mobilization is extremely important. The interest and response to the policy of modernization of coastal areas in a province by investors, the business team, the people and the state has important implications related to the ability to mobilize capital to coastal area development of a province. – Technology and ability to acquire modern technology. To modernize the coastal area, modern technology is very important, but having modern technology is really more important. Because there is money to buy modern technology, but to buy modern technology to develop fields, the necessary products are even more important. – Organize advanced production by industry and territory. The organization of the product value chain by industry has become an important factor to modernize and develop for coastal areas. It is an important factor for enterprises located in coastal areas to participate in global value chains and supply networks on the basis of connecting with large, transnational and multinational economic corporations. The author wants to mention value chains of mechanical products, seaports and logistics, tourism, fishing and seafood processing In order for coastal territories to achieve modern development, it is necessary to production organizations in this area with advanced forms (such as multidisciplinary complexes, such as seaport complexes – industry – logistics – marine tourism – general services), free trade zones , resorts 558
3. 2.4. The indicators reflect the modernization of the coastal area Analyzed according to 7 basic criteria below. (1). Proportion of products (or sectors) with high technology content in the total GRDP) H2 H2 = (g: G) .100; (%) (1) in which: g: Value of product (or field) using high technology G: Value added (VAT) This is an indicator that has not yet been used to analyze the development results and effectiveness for a territory. Indicators directly reflect the development level of the regional economy, specifically, the level of using high technology to make key products of a country as well as of a region. The more products with high industrial content, the higher the technological level of the economy, and vice versa. If possible (if conducting annual surveys. This is difficult for a postgraduate student to do), it is possible to analyze further indicators of the technological level of enterprises and their own e– government local rights. The proportion of enterprises using high technology in the total number of enterprises or e–government development reflects the degree of development modernization and development management in coastal areas. At the same time, if possible, assess the level of modernization of the infrastructure. However, this is difficult, if possible, it should be more qualitative or estimated such as modernization of roads, electricity, water, telecommunications, banking, customs and waste treatment systems (2) .The proportion of fields of high technology use in the total GRDP (H3) H3 = ( Gc : G).100 ; % (2) in which: * Gc: GRDP increase of hi–tech field in the research period (GRDP year i of hi–tech field minus GRDP of hi–tech field in original year). * G: The increase in the total GRDP of the coastal area (GRDP in year i minus GRDP of original year) The larger the H3, the larger the field of high technology use and the greater contribution to the development of the economy. This indicator concretizes the meaning of products with more or less high–tech content as mentioned above. (3). Social labor productivity (H4 ) H4= G: L; Million VND/ Labor (3) in which: G: As noted in formula (1) Labor productivity is the efficiency of using labor. It is measured by GRDP, averagely one worker per year). Labor productivity is a composite indicator that consolidates the efficiency of national, regional and provincial development. This is a not new but indispensable indicator when analyzing development efficiency at national or regional and provincial levels. (4). GRDP/ person GRDP/ person = GRDP: D; Million VND/ person in which, D is the population. The higher the labor productivity, the greater the GRDP/ person. Currently, according to National Statistics, in 2017, GDP per capita (at current prices) of the G20 countries was about over 40 thousand USD and that of 5 countries with emerging economies was over 15 thousand USD. This was a general indicator reflecting the level of economic development and the 559
4. ability of the population to live. The larger the GRDP per person, the higher the modernization level of the coastal area was. (5). Economic openness (Share of good or export value in total GRDP; (H5) H5 = (X: G).100; (%) (4) in which: X: Value of the good (or export value) G: as noted in formula (1) Normally, for the country level the "openness" of the economy is calculated by dividing the value of exports by GDP or dividing the total value of exports and imports by GDP. For the study of modernization of coastal areas of a province through analysis of economic openness to see the competitiveness and competitiveness of coastal products in the development process. Therefore the economic openness of the coastal zone is calculated by dividing the export value by the total GRDP. The higher the openness indicates the better the product quality, the higher the competitiveness and indirectly reflects the high level of technology application in the coastal area. (6). Proportion of value added in total production value (H6) H1= (G: S).100 ; (%) (5) in which: G: Value added (VAT) S: Total production value (GTSX) Increasing added value is an important requirement for the development of a country, territory as well as for a province. Statistics Department has a guide to calculate this indicator. Development creates more added value is an absolute requirement. The higher the share of value added in total production value, the better and vice versa. (7). Production concentration coefficient (concentration in coastal areas compared to the whole province) (T3) T3 = kv : K ; (Times) (6) in which: Kv = output value of the industry in the coastal area: Total production value of the coastal area or output value of value added of the non–agricultural sector of the coastal area: production value or GRDP of the whole coastal area K = output value or industrial value added of the whole province: production value or GRDP of the whole province or value added of the non–agricultural sector: production value or GRDP of the whole province The higher T3 is, the level of centralization, the higher the modernization is, and the more efficient the development of centralized investment will be. 3. ASSESSING THE CURRENT STATUS OF COASTAL DEVELOPMENT FROM THE MODERN POINT OF VIEW 3.1. Assessing by comparative advantages In principle, the author used the scale method to assess comparative advantage of coastal areas in Thanh Hoa province. The author refered to the score of Dr. Nguyen The Vinh (Promoting comparative advantages to promote socio–economic development of Vinh Phuc province) [5], combined with the results of SWOT analysis and consultation with scientists and managers at the conference in August 560
5. 2019 in Sam Son city on coastal development, the author assessed comparative advantage through determination outstanding points of the coastal area of Thanh Hoa province. Table 1: Comparison score by factors of coastal area in Thanh Hoa province Remaining Coastal area The coastal territory from Indicators territory of of Thanh Hoa Hai Phong to Quang Binh Thanh Hoa 1. Geo–economic location 10 6 8 2. The land can be used for non– 10 6 7 agricultural development (industry, urban, service, roads ) 3. Tourism resources and Tourism 10 7 9 service facilities 4. Transport conditions 10 7 9 5. Existing modern industry 8 5 10 6. Possibility of agricultural 7 10 7 development 7. Fresh water sources 7 10 7 8. Immigration and impacts on 0 common development Note: 10–point scale (from 0 to 10; the higher the better); large in–migration, greatly affecting technical infrastructure development Source: Author 3.2. Assessing the current status of coastal development in Thanh Hoa province The author would like to present an overview of the results of the assessment of the current status of coastal development in Thanh Hoa province. In general, the socio–economic area of Thanh Hoa coastal area has developed quite well, the social face has made progress. After 10 years, GRDP/ person increased significantly, compared to 2010, in 2019, GRDP/ person was about 2.6 times higher. The rate of poor households reduced by 10.8 percentage points (about 1% per year). Contribution to the provincial economy from 26.5% to 30.9% (an increase of 4.4 percentage points). But in general, development was slow, not modernized, and therefore efficiency was only slightly higher than the average level of the province and in particular, low labor productivity and low living standards of the people. Technical infrastructure did not meet the needs of fast and large–scale development. At the same time, the development lacks a long–term vision and was set in the context of globalization with the industrial revolution of automation, intellectualization and the development of the knowledge economy. Due to a low starting point, although the growth rate was about 10–11%/ year, it did not seem to have brought into play the great potential of the coastal area. Growth was relatively fast, but the added value was limited. The ratio of value added in the total new production value was about 44.5–45%. In the past 9 years, in general, the economy has still grown, but the growth is not large and tends to slow down. VAT in total value of production is at low level. Exports make an important contribution to the increase in economic size (about 47%: take the share of the increase in export value in 10 years divided by the increase in the total GRDP multiplied by 100% (specifically: 19211/40849). It is an important point to consider to make a decision for the next period. 561
6. Table 2: Some aggregated indicators for coastal areas in Thanh Hoa province Indicators Unit 2010 2015 2019 1.Production value, 2010 price Billion VND 33196 48.118 83991 2. GRDP, current price Bil VND 13.345 30.247 54.195 3. GRDP, 2010 price Bil VND 13.345 21.605 37.376 % compared to production value % 40,2 44,9 44,5 GRDP growth rate in periods 5 and 4 years % 7,8 10,1 10,6 4. Export value Million VND 100,2 522,8 1015 % compared to Thanh Hoa province % 20,3 34,3 40,4 Note: periods of 2011–2015 and 2016–2019 Source: [3] In 9 years, industry increased by 12.6% on average, services by 12.2% and agriculture by about 2.8%. As a result, the contribution to economic growth in the coastal areas of the sectors was similar. Industry contributed about 58.8%, services was 37.3%; while agriculture contributed only 3.9%. So if the quality of industrial growth increases, the contribution of industry to the overall growth of the coastal economy will also increase. However, the important issue is that the service sector's contribution to economic growth has not been commensurate with the potentials and strengths of the coastal area. The service sector accounts for about 35% of the GRDP, but only contributes about 37% is inadequate. The important issue is how to make the service sector contribute more to the economic growth of coastal areas in Thanh Hoa province. To do so, it is essential to increase high–quality tourism, bringing great added value and whether in the Nghi Son port area should and can develop a free trade area. The quality of growth is still limited. In the 10 years from 2011 to 2020, in the coastal area, due to heavy mechanical industry, the added value is low; Services are mainly sea transport with high cost and tourism mainly welcomes domestic tourists, the number of days of stay is small and the spending is very limited, so the added value is not much. Therefore, the rate of increase in strij increase in total value of production from 2010 to 2015 has increased but from 2015 to 2019 decreased. In 2019, if we use the export value divided by the GRDP to consider the openness of the economy in the coastal area of Thanh Hoa province, this index will be about 39%. It is still low (this figure of the province is about 29–30% and that of the whole country is about 78%). That proves that the competitiveness of goods in the coastal area of Thanh Hoa province is also low (the number of exported goods is not much). In 5 years (2016–2019) the proportion of non–agricultural sectors increased by 3.7 percentage points, while the economic growth rate only increased by about 0.5%. That said, for every 1% increase in the non–farm share in the GRDP, it creates 0.13 percentage points of economic growth. That is, if we want to increase the GRDP growth rate by 1%, we need to increase at least about 4–5% of the proportion of the non–agricultural sectors in the total economy. This is a level of low impact from changes in economic structure to economic growth. 562
7. Table 3: Structure of industries and sectors in the coastal area of Thanh Hoa province Indicators Unit 2010 2015 2019 1. GRDP, 2010 price Bil VND 13.345 21.605 37.376 GRDP growth rate in the period of 5 years % 10,1 11,6 2. Divide by industry Agriculture Bil VND 2.989 3.068 3924 Industry Bil VND 6.192 10.845 20.333 Services Bil VND 4.164 7.692 13.119 3. Field of high technology use Bil VND 1.054 3.414 6.167 The proportion of services in GDP of Japan, Korea and Singapore all accounts for over 70% [3] Source: [3] In the past time and in the economic structure, the field of using high technology in coastal areas is also limited. The rate in the high–tech fields does not change much in the 2016–2019 period (about 15.8% in 2015, and only about 16.5% by 2019). All of these things prove that the economy of the coastal area has not yet developed in the direction of higher efficiency. In general, businesses have not implemented digital transformation, services have not yet transformed; public services have not been formed in the direction of e–government. This is a problem that must be fixed soon and changed quickly to hope for an effective and sustainable acceleration. Using vector analysis, the author has calculated the economic restructuring speed of the coastal area. According to this method, when cos = 0 or = 900, then the displacement speed k = 1 (the restructuring is the fastest or the largest). When cos = 1 or = 00, then the rate of structural displacement k = 0 (no restructuring). Calculation results show that in the period from 2010 to 2019, the speed of economic restructuring of the Thanh Hoa coastal area is still slow, not creating a premise for rapid modernization of coastal areas. quality economic growth. 563
8. Table 4: Speed of economic restructuring in coastal areas Thanh Hoa province Speed of economic Period cos ϕ ϕ restructuring 2010–2013 0.99994 0,61 0.58 2013–2015 0.99961 1,61 1,81 2015–2019 0.99992 0,71 2.92 Source: Authors processed according to statistics – The industrial structure is also not modern. The mechanical industry, electricity, automobile manufacturing and assembly are the main components. The petrochemical refining industry has just been completed initially and has just come into operation, so it has not contributed much. In general, the existing industry in the coastal area has not great added value. Table 5: Some indicators of industrial development in coastal areas Indicators Unit 2010 2015 2019 Industrial value added Bil VND 6.192 11.062 20.333 In which: + Metallurgical, mechanical industry Bil VND 693 1371 3355 Proportion of total % 11,2 12,4 16,5 – Petrochemical industry Bil VND – 1555 5042 Proportion of total % – 23,1 24,8 – Electricity production Bil VND 873 1526 2826 Proportion of total % 14,1 13,8 13,9 – Production of materials (cement, other Bil VND 632 1460 3110 construction materials) Proportion of total % 10,2 13,2 15,3 – Manufacturing and assembling cars Bil VND 848 1604 3335 Proportion of total % 13,7 14,5 16,4 – Other industries Bil VND 3127 4148 2664 Proportion of total % 50,8 37,5 13,1 Source: [3] – In 2019, according to Hanoi Statistics, this city welcomes about 16 million visitors, including about 6.3 million international visitors. If Thanh Hoa has a solution to catch 10% of these tourists and direct them to the sea, there will be 60,000 more international visitors (and if an average of 200 USD/ tourist/ 3 days, there will also be an income of about 60 million USD for coastal areas). At that time, revenue from tourism will increase a lot. That is what needs to be considered to have an overall solution for tourism development in the coastal area of Thanh Hoa province. 564
9. Table 6: Some indicators of tourism development in coastal areas Thanh Hoa province Indicators Unit 2010 2015 2019 + Total number of tourists 1000 visitors 1750 3156 4570 – Only international visitors 1000 visitors 20,5 95 230 + Revenue Bil VND 653,8 1.430 2.258 Average revenue per tourist Thousand VND 373 453 494 Source: [3] – In the coastal area of Thanh Hoa province, important sectors such as sea transport, seaport services, inland ports (ICD) and logistics have not developed as expected. This is a weakness that needs to be overcome (especially when the capacity of deep–water seaports reaches about 35–40 million tons/ year). Technical infrastructure for the port and port connection with the arterial North–South traffic route is still limited. – The output value per hectare of agricultural land has increased, from 54.4 million VND in 2015 to 70.3 million VND in 2019, but in general the increase is slow. The increase is only about 4–4.5%/ year. – In general, fishermen are mainly developing in a spontaneous situation. Although the average output of seafood per capita is relatively good (about 94 kg/ person, if compared with the average needed about 40–45 kg/ person/ year, the remaining output) as goods supplied for other places, especially for Hanoi city. Table 7: Some indicators on fisheries development in coastal areas Indicators Unit 2010 2015 2019 Seafood value added, 2010 price Bil VND 1.154 1.731 2.353 Main products 1. Production Ton 88.995 103.950 108.500 – Production capacity Ton 73158 75750 80500 – Farming capacity Ton 15837 28200 39500 2. Farming area Ha 9888 10.400 10500 – Brackish water farming Ha 7400 7400 7400 – Fresh water farming Ha 2488 3000 3500 Source: [3] 4. SOME MAJOR ORIENTATIONS ON COASTAL MODERNIZATION IN THANH HOA PROVINCE UNTIL 2045 From the analyzed development status and from the strategic direction to 2045 of Thanh Hoa province, it is identified in the Resolution of the Politburo of the Communist Party of Vietnam on the province's socio–economic development. Report the picture to 2045 for coastal areas in Thanh Hoa province [2]. At that time, Nghi Son seaport was completed with a capacity of over 50 million 565
10. tons/year; There were 2 coastal cities Sam Son and Nghi Son; has 1 economic zone, 1 hi–tech park, 12 industrial zones, 3 tourist resorts (Hai Tien, Hai Hoa, Nghi Son). From 2020–2045, strive for an economic growth rate of about 11–12% and by 2045 GRDP/ person in coastal areas will reach about 22–23 thousand USD. Basically, the economy has been modernized (services account for 47–48%, industry accounts for 51–52% and agriculture is less than 1–2%). The image of coastal areas in Thanh Hoa province has had a qualitative change. – On the basis of considering potentials and advantages and consulting with local leaders and experts, the author said that it is necessary to speed up the introduction of Nghi Son Petrochemical Complex (Joint Venture Vietnam – Japan – Kuwait) with an investment capital of 6,149 million USD, phase 1 with a capacity of 10 million tons of crude oil/year will be put into operation right after 2020. Continue to promote ground deployment to build a number of projects. steel rolling and refining project, including Nghi Son steel rolling mill project registered for investment with a capital of 2,194 billion VND, a factory producing high quality steel billets, design capacity of 750,000 tons/ year, construction steel rolling (low, medium, high carbon steel, alloy steel) and POMIDO steel rolling mill project, production of billets and steel products with a capacity of 650,000 tons/ year. Petrochemical refining industry continues to be one of the key industries of Nghi Son economic zone (with a capacity of about 6 million tons/ year). – Modernization of Nghi Son economic zone. – Modernize entertainment areas and modern tourist resorts of FLC Group and SunGroup. For coastal areas in Thanh Hoa province, priority should be given to linking coastal tourist sites into a chain of tourist destinations and taking Sam Son as the nucleus. Coordinate with Thanh Hoa city, western tourist areas of the province to increase the diversity of tourism products. – Modernize the technical infrastructure network, especially completing the phase 2 of Nghi Son deep–water seaport to reach a cargo capacity of about 150 million tons/ year. Complete high–speed, high–speed coastal shaft. 566
11. 5. SUGGEST SOME SOLUTIONS Solution 1: Improve state management efficiency for coastal development. This is the most important solution. Solution 2: Invest in development and attract strategic investors towards modernizing coastal areas. Coastal development in Thanh Hoa province requires a lot of capital and modern technology, so it is necessary to commit to ensuring convenience and profitability to attract investors. Solution 3: Business development. This is a shock force to increase employment and increase the scale of the economy, so it is necessary to develop businesses, including many large enterprises and enterprises from leading developed countries in the world. Solution 4: Developing high quality human resources. On the basis of the development orientation of key fields, the main products and innovation of local governance should have a plan to develop managerial, professional, digital transformation 6. CONCLUSION The coastal area of Thanh Hoa province has great potential for economic development, modernization of coastal area in Thanh Hoa province is an important issue for the economic prosperity of this province. Coastal provinces, districts and cities play a decisive role in the modernization of coastal areas in the province. Attracting large domestic economic groups and continuing to attract FDI has strategic significance for the modernization of coastal areas in Thanh Hoa province. Modernization of coastal areas in Thanh Hoa province is possible if the will and political determination of the government at all levels are high and supported by the people. REFERENCES 1. The 4th Party Central Executive Committee, term X (2007), Resolution 09 on the Vietnam Marine Strategy to 2020. 2. Politburo (2020), Resolution 58NQ/ TW dated 5/8/2020 on construction and development of Thanh Hoa province to 2030, vision to 2045. 3. Thanh Hoa Statistical Office, Statistical Yearbook 2019. 4. Nguyen Quang Thai & Ngo Thang Loi (2007), Sustainable Development in Vietnam, Labor – Society Publishing House, Hanoi. 5. Nguyen The Vinh (2015), Promoting comparative advantages to promote socio–economic development in Vinh Phuc province, PhD thesis. 567