Institutional reform to drive central Vietnam s coastal economy

The Ministry of Justice has announced plans to seek public input on a draft Law on Urban Development, which would introduce the concept of a special economic zone (SEZ) across central Vietnam's coastal regions. This new administrative unit would be established in strategically important locations, governed by a distinct model, and operate with exceptional mechanisms to foster socioeconomic development.

The government would decide on SEZ establishment after consulting the National Assembly Standing Committee. Two options are outlined for determining SEZ criteria: either a coastal zone already established by the prime minister meeting specific population, area, and infrastructure requirements, or a more flexible set of criteria established by the government.

A key feature of the draft is a new governance model, where each SEZ would have its own administrative authority with expanded powers over personnel management, organizational structure, and customs operations. Experts view this proposal as a significant shift in the development approach for economic zones, moving towards integrated development spaces with streamlined administrative procedures.

In central Vietnam, coastal SEZs like Chu Lai, Dung Quat, and others have been vital in attracting investment, promoting industrial development, logistics, and exports. However, despite nearly three decades of development, disparities in development levels and operational efficiency persist among Vietnam's economic zones. Pham Ho Hoang Long, general director of Vinh Hung Energy Investment JSC, emphasizes that the primary challenge is institutional delays and the need for innovative reforms to encourage economic growth.

The review and amendment of several laws, including the Land Law, demonstrate the government's commitment to removing these institutional delays and implementing reforms that can drive development. Long believes that after years of development, the greatest obstacle is not land availability or investment incentives but the lengthy administrative procedures required for large-scale projects, which can significantly extend project preparation time and increase opportunity costs for businesses.