Investment & Finance

Catching up on new world trends

SGI

Recently, the Ho Chi Minh City Economic Forum 2019 (HEF-2019) under the theme “Ho Chi Minh City: the next Asian and Global Financial Center” was organized by the People’s Committee of Ho Chi Minh City, in which more than 800 delegates participated, including leaders from the Government and various ministries, representatives of diplomatic agencies, leaders from the World Bank, leaders of international financial institutions (such as IMF, IFC, ADB), financial and corporate experts and more than 30 eminent national and international speakers.

Ho Chi Minh City leaders and Government representatives and participants attended the Ho Chi Minh City Economic Forum. Photo: HOANG HUNG

Ho Chi Minh City leaders and Government representatives and participants attended the Ho Chi Minh City Economic Forum. Photo: HOANG HUNG

On this occasion, Saigon Investment held an interview with Mr. Nguyen Thanh Phong, Chairman of People's Committee of HCMC, Member of Central Committee of the Communist Party, and Deputy Secretary of City Party Committee.

JOURNALIST:  - Mr. Chairman sir, what is the main purpose of HEF-2019?

Mr. NGUYEN THANH PHONG:  - HEF-2019 was organized by the People's Committee of Ho Chi Minh City in order to receive comments and feedback from leading speakers and national and international experts in the field of socio-economic development. In particular, receiving direct opinions of leaders from the Government and the Central ministries in orientation and planning of developing Ho Chi Minh City into a regional and international financial center. In addition, HEF also aimed to attract the attention of major domestic and international economic and financial groups.

The theme of HEF-2019 was "Ho Chi Minh City: the next Asian and Global Financial Center", so the purpose of HEF-2019 was to create a forum for exchange between City leaders and experts, researchers, financial institutions, and domestic and international investors to discuss and evaluate the local status, prospects, opportunities and challenges at present, giving a clearer perspective for setting up a development plan for Ho Chi Minh City to become a regional and international financial center.

The forum results will make an important contribution to the direction of the development of the Financial Center Project as well as for the preparation of resources, policies, planning and implementation. The forum also aimed to attract and call attention from businesses and financial institutions to join with the City Government, contributing towards attracting investors to realize the goal of developing Ho Chi Minh City into becoming a regional and international financial center.

To achieve this goal, Ho Chi Minh City must first become a financial center of Vietnam. Accordingly, the City must ensure important resources and pre-required conditions such as appropriate national policies, plans, vision and strategies to make the City a center for services development, especially financial services.

HEF-2019 focused on four main topics: (1) Ho Chi Minh City to be a regional and international financial center: Its current situation; objectives; and implementation route. (2) Experiences in building and forming international financial centers. (3) Eco-system for the sustainable development of an international financial center. (4) National policy orientation and role of City Government to develop HCMC into a future regional and international financial center.

- How important is it to develop HCMC into a regional and international financial center?

- Ho Chi Minh City is the leading economic, commercial, financial, and international gateway of Vietnam. The City's aspiration is not only to maintain a leading position in the whole country but also narrow the gap, and proceed to catch up with successful cities in Southeast Asia and Asia. In the era of fast paced globalization, in order to maintain a leading position in the country, and to catch up with smart and creative cities in Southeast Asia and Asia, Ho Chi Minh City must act quickly to catch up with the new and latest global trends.

In recent years, the Party and the State have issued many guidelines and policies to promote the development of the financial market, gradually turning the financial market into an effective channel for capital for the economy, and gradually reducing the dependency on bank loans.

For Ho Chi Minh City, from the beginning of 2001, finance has been identified as one of the nine major services of the City and since 1998, when the Ho Chi Minh Stock Exchange (HOSE) was established, it has been one of the important premises for the financial market to grow steadily and contribute to the City's economic development.

Currently, the City's financial industry is growing at an average rate of 8.8% per year, accounting for 10% of the nine major services and for 5.7% of the City's GRDP. The financial sector has also helped the City mobilize about VND 460,000 billion/year to promote socio-economic development.

Although achieving positive results in general, the level of development and transaction size of the City's financial market is still small and not really attractive to large economic groups in the world. The City is gradually becoming a megacity and will always aspire for stronger growth and more sustainable development.

However, successful implementation is a complex, long, arduous and challenging process. Therefore, the City wishes to continue to receive many suggestions and feedback from experts, scientists, businesses and financial institutions. The development of Ho Chi Minh City to become a financial center of the region and the world is very important for the City to make a breakthrough in the coming period.

- To become a regional and international financial center, how will the City prepare in the near future?

- Firstly, it is necessary to establish a vision of making Ho Chi Minh City into a financial center in the region and later into an international standard financial center. Along with that, preparing human resources for the financial market and related support services, especially by bringing in international experts. At the same time, further improving the business environment through promoting administrative reforms; improving the efficiency of law enforcement; improving tariff-related policies; and regulating the market in a smart and transparent way with high reliability. On the other hand, there is an urban planning policy for building a synchronous technical infrastructure system, especially in transport and technology.

Besides, I think that the development of the Ho Chi Minh City Financial Center must be associated with the transforming of the economy, namely digital economy, digital government and digital society; as well as set in Vietnam's overall financial sector development strategy. In particular, it is necessary to focus on developing various types of financial products and services, developing diversely and synchronously with markets such as money market, bond market, stock market; develop asset management technology; strengthen global network of financial technologies; complete the monitoring system and financial regulations.

Currently, the Southern key economic regions contribute more than 45% of GDP; 42% of revenue and services; value added services account for 46%; exports account for 40%; foreign investment account for 56%; investment value accounts for 45%; remittances accounts for 65%; market capitalization in Ho Chi Minh City accounts for 93.5% of the whole country; with 50% of all businesses located in Ho Chi Minh City and 65% in other parts of the region. In addition, this is also a large training center of the country with many quality training institutions, which will facilitate financially the formation of training programs to support financial services and startup businesses.

Recently, we organized two missions to exchange experiences on financial center development with several major financial centers in Europe and Asia. It showed that to successfully build an international financial center, it needs maximum support from the Government; clear legal policies to attract international investors; and attract appropriate talent to work.

At present, Ho Chi Minh City is implementing the project to build a smart city. This is also an important condition for Ho Chi Minh City for becoming a regional and international financial center. Therefore, this forum will help the City with more valuable data and valuable experience sharing to build this project in accordance with required high standards.

- Thank you very much.

Translated by Mathew Hùng

Do Tra Giang (Interviewer)

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