The Transformative Role of Industrial Parks and Economic Zones in Vietnam’s Development

By Vuong Thi Minh Hieu
Fri, November 17, 2023 | 10:17 PM GMT+7
Deputy Head of the Economic Zones Department, Planning and Investment Ministry

The Heartbeat of Economic Growth

Industrial parks (IPs) and economic zones (EZs) have emerged as pivotal elements in Vietnam’s socio-economic development landscape. Acting as catalysts for urban transformation, these zones have played a vital role in shifting agricultural backwaters into bustling urban and industrial areas. Their influence is not merely economic; they are reshaping the very fabric of local communities, contributing to new urban areas, enhanced services, and improved transportation systems.

Revitalizing Coastal and Border Areas

Coastal economic zones, known for their expansive socio-economic prospects, are crucial in rejuvenating underdeveloped coastal regions. Through a diverse array of industries—including manufacturing and tourism—these zones are becoming economic powerhouses, fostering the development of high-quality urban areas and upscale coastal resorts that contribute significantly to coastal city infrastructures.

In parallel, border gate economic zones have revitalized trade and tourism in previously remote provinces. These zones bolster the economic framework by expanding markets and fostering goods exchange, catalyzing the development of commercial hubs that enhance regional connectivity and economic resilience.

A Leap in Industrial Development

Since the establishment of Vietnam’s first industrial park, the Tan Thuan Export Processing Zone, in 1991, the nation has seen significant growth in industrial zones. Currently, there are 413 IPs across the country—369 outside EZs, 37 within coastal zones, and 7 in border gate zones. These parks cover substantial areas, with approximately 129,900 hectares of natural land and about 87,700 hectares designated for industrial use. The occupancy rate is a promising 72.9%, with 295 currently operational and 119 under construction.

The Growing Impact of Border Gate and Coastal Economic Zones

The first of Vietnam’s border gate economic zones was established in Mong Cai, Quang Ninh, which has since inspired 25 more in various provinces, attracting over $4.4 billion in investment. Similarly, coastal economic zones, starting with the Chu Lai Open Economic Zone in 2003, have expanded to include 18 zones spread over 857,600 hectares, leading to significant developmental strides in these regions.

The Eco-Industrial Movement

A new trend is emerging among industrial parks: the shift towards eco-industrial models. This transformation reflects a growing commitment to sustainability, balancing economic growth with environmental stewardship. Following the National Green Growth Strategy, which seeks to promote cleaner production methods, Vietnam is investing in eco-industrial parks, linking environmental protection with industrial activities.

Over 72 enterprises have already adopted more than 900 energy-saving measures through pilot programs, demonstrating the capacity for substantial resource conservation. The environmental benefits are profound, achieving energy and water savings while mobilizing significant investment for sustainable practices.

Charting a Sustainable Future

Looking ahead, the development of industrial parks and economic zones in Vietnam is poised for further innovation. A robust plan anticipates several transformative strategies that focus on sustainability:

1. Innovative Models: Pioneering new IP and EZ models that prioritize ecological features and advanced technologies, aiming to create a “Vietnam’s Silicon Valley.”

2. Investment in Innovation: Emphasizing science and technology as foundational elements for future growth while fostering a supportive environment for tech-driven startups.

3. Capitalizing on Global Interests: Attracting major investments from international corporations in sectors deemed national priorities.

4. Efficient Resource Management: Prioritizing efficient land use in industrial development while minimizing the impact on productive agricultural lands.

5. Infrastructure Development: Credit for true economic development may also require parallel investment in social infrastructure—providing housing and amenities for the workforce within these industrial locales.

6. Regulatory Oversight: Enhancing regulatory frameworks to ensure compliance with environmental standards while streamlining administrative processes for investors.

7. Attractiveness of Hubs: Strengthening the competitive edge of IPs and EZs through upgraded infrastructure, including logistics and transportation services.

Industrial parks and economic zones represent more than just sites for manufacturing; they are dynamic environments shaping the socio-economic landscape of Vietnam. Through innovative strategies and a commitment to sustainability, these zones will continue to advance, meeting both local and global demands. As Vietnam evolves, so too will its industrial sector, promising a robust economic future driven by responsible development and community integration.