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Barriers to industry promotion

2013-11-18 12:06:51

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Funding support for industrial projects, especially for industrial demonstrations and the modern technological models in production is too low to be considered as the main reason for the low effectiveness of industry promotion in the north and its lack of attractiveness to businesses.

 

According to Ministry of Industry and Trade’s Agency for Regional Industry development (ARID), the total cost of the approved industry promotion funds for 28 provinces and cities in the north this year would be VND118.159 billion; of which national funding support accounted for VND53.069 billion and local funding VND65.09 billion. However, in the first nine months of the year, disbursement only reached just over VND61.1 billion, accounting for 51.71 percent of the annual plan and only 11 of 28 provinces and cities met the disbursement requirements.
 
According to ARID’s interpretation, this slow disbursement was due to the fact that Circular 161/2012/TT-BTC dated 2/10/2012 specified modes of control and payment of the state budget through the State Treasury, including the provisions on delayed disbursement. In addition, the capacity of the industrial project evaluation teams at local levels was limited, resulting in low quality projects and a low rate approval.
 
However, local reports showed that there were barriers to these low disbursements, for example, too low funding support. “Dien Bien is one of the most underdeveloped provinces in the country, with scattered rural industrial bases and limited levels of financial resources. It is difficult for these bases to adopt technological innovation and applications into production. Meanwhile, industrial funding sources failed to meet their requirements, and failed to create the necessary incentives,” Director of Dien Bien’s Center for Industrial Promotion and Industrial Development Consultancy Nguyen Van Cong said.
 
Deputy Director of Ninh Binh Province’s Department of Trade and Industry Hoang Trung Kien said “Due to limited industry promotion funding, the local vocational training program for rural workers until 2020 failed to materialize”. Ninh Binh is about to fail to complete the annual vocational training plans and will have to repay VND400 million of the VND600 million of granted national funding as it failed to recruit apprentices and organize vocational training courses.
 
“To make a technical demonstration or technological application model, companies have to spend tens of billions of dong. So, with maximum funding support of VND250 million per model, they can hardly carry out anything,” Director of Ha Giang-based Hung Cuong Trading Company Limited Hoang Trung Cuong said. In addition, the delay in issuing the amendment to Circular 125/2009/TTLT/BTC-BCT is also considered as one of the barriers to industry promotion activities.
 
According to ARID Deputy Director Phan Van Ban, the agency is striving to prepare legal documents guiding the implementation of Decree 45/ND-CP, especially Circular 125/2009/TTLT/BTC-BCT. “There will be many new features, such as increased support levels for some projects, thereby partly removing local budget constraints; the review and streamlining related administrative procedures to create favorable conditions for the implementation of industrial projects,” he said.
 

Deputy Minister of Industry and Trade Le Duong Quang said “In order to settle the inadequacies of industry promotion funding, ARID should rapidly complete the amendment to Circular 125/2009/TTLT/BTC-BCT. In particular, it should see to the local need for funding support. Meanwhile, cities and provinces should promptly settle industry promotion difficulties in favor of the beneficiaries to ensure completion of the annual plan.”

 

Source: ven