'Only by shedding its institutional framework, which is riddled with too many patches, can Ho Chi Minh City achieve a breakthrough.'

After nearly two years of implementing Resolution 98 on special mechanisms for the development of Ho Chi Minh City , despite some positive changes, the "locomotive" of Ho Chi Minh City still seems to be hampered by invisible "bottlenecks" that need to be removed. The draft Resolution of the National Assembly amending and supplementing Resolution 98 is expected to be approved by the National Assembly today, December 10th, with many new mechanisms aimed at creating breakthroughs for this "megacity".

Speaking to Thanh Nien newspaper , Dr. Tran Khac Tam, a member of the 13th National Assembly, said that with this resolution, the National Assembly and the Government need to bravely "unleash" and allow Ho Chi Minh City to proactively experiment with policies different from those stipulated in the regulations.

"Only when Ho Chi Minh City, the 'high-speed locomotive,' has its own fuel source and test track can the city truly make a breakthrough and become a megacity – a regional and global center for finance, manufacturing, logistics, and innovation," Mr. Tam said.

Dr. Tran Khac Tam believes that Ho Chi Minh City needs to shed its outdated institutional framework, creating a breakthrough for this "megacity" in the coming period.

PHOTO: GIA HAN

Ho Chi Minh City needs a comprehensive institutional "surgery".

* The revised Resolution 98, currently being submitted to the National Assembly, proposes the addition of a series of special mechanisms, particularly for Ho Chi Minh City. How do you assess the "dose" of this revision?

* Dr. Tran Khac Tam: Ho Chi Minh City has now become a "megacity" with over 13 million inhabitants, with an economic scale and a leading role in the entire Southeast region. Such a colossal entity cannot operate smoothly using the machinery and processes of a conventional "institutional system," even though that system has been tailored and modified many times.

Therefore, I believe it is time for Ho Chi Minh City to undergo a comprehensive institutional "surgery" to "remove the institutional cloak that has too many patches." Only then can Ho Chi Minh City truly achieve breakthrough development.

* During the discussions, concerns were raised that allowing Ho Chi Minh City to retain 100% of the revenue from land in areas designated for transport-oriented development (TOD) would violate the Budget Law. What is your opinion on this?

* I fully support this proposal and believe that the National Assembly needs to be decisive. We must be honest: where will the money come from to build the urban railway? The capital requirements for Ho Chi Minh City's metro system amount to tens of billions of USD. The central government budget cannot handle it, and the local budget, under the current decentralization system, is also insufficient.

Ho Chi Minh City needs special mechanisms to contribute more to the whole country.

PHOTO: NHAT THINH

The TOD mechanism is the key to this problem. When Ho Chi Minh City invests budget funds or mobilizes capital to compensate for land acquisition and clearance, creating clean land around the metro stations, the land value increases many times over. This increased value (differential land rent) must be retained 100% for reinvestment in the transportation infrastructure itself. If the revenue is transferred to the central government at the usual rate, Ho Chi Minh City will lose motivation and lack the resources to reinvest in subsequent metro lines.

Perhaps we shouldn't be afraid of violating the Budget Law. Resolutions of the National Assembly are legal documents designed to address practical issues that the law hasn't yet caught up with or is inadequate for. This isn't Ho Chi Minh City "begging" the central government for money, but rather requesting a mechanism to generate its own resources. If we mechanically worry about the uniformity of the legal system, we will miss the opportunity to create a modern transportation network for this megacity.

* Another highlight of the resolution is the Free Trade Zone (FTZ) associated with Cai Mep Ha port. However, many experts and National Assembly representatives argue that tax incentives alone are not enough to compete with Singapore or Dubai. According to you, what "weapons" does Ho Chi Minh City need for this FTZ?

* If we only offer a 10% tax incentive for 20 years or personal income tax exemptions, we're only touching the "tip of the iceberg." Strategic investors, the "eagles" of technology or international finance, will need more than that. They need a superior institutional ecosystem. Ho Chi Minh City's Free Trade Zone (FTZ) must be considered a "national institutional laboratory" where unprecedented mechanisms can be boldly implemented.

Instead of the State handling every detail of the planning process, entrust the overall development to a globally capable strategic investor. They would have the authority to create zoning plans, detailed plans, invest in infrastructure, and attract secondary investors. The State would only manage through key performance indicators (KPIs) related to the environment, technology, and building density.

At the same time, thorough "post-inspection" administrative procedures are needed. The current draft, which allows for the exemption of investment registration certificates before the establishment of economic organizations, is a step forward, but it needs to be bolder. Let's allow for exemption from specialized inspections and genuinely remove non-tariff barriers within the bloc.

Furthermore, financial mechanisms and cash flow are necessary. Transactions in foreign currencies must be permitted, and profits and capital must be freely convertible within the region. Without the freedom of capital and data flows, we cannot dream of a regional-level financial or logistics hub.

The series of special and specific mechanisms in Resolution 98 are expected to usher in a breakthrough development phase for Ho Chi Minh City, the "megacity".

PHOTO: INDEPENDENT

Allow Ho Chi Minh City to proactively pilot policies different from those stipulated in the regulations.

* One of the proposals in this revised Resolution 98 is to expand the list of projects attracting strategic investors. However, many argue that expanding by listing each type of project is rigid and easily becomes outdated.

* It's true that when drafting laws, we often get bogged down in listing things. Today we see the need for a waste incineration project, so we include it. Tomorrow, new technologies or new projects emerge, and we have to revise them again.

I believe that instead of listing "fish," we should give Ho Chi Minh City a "fishing rod" and the right to choose the "water." The resolution should only specify qualitative and quantitative criteria (e.g., high technology, investment level, spillover effects, R&D commitments...). Then, the Ho Chi Minh City People's Council should be given the "entire package" to decide on the specific project list.

Furthermore, the process for selecting strategic investors in the draft is still heavily reliant on administrative procedures. We need a mechanism of "investment agreements" or "investment contracts" like those used in developed countries. What commitments the investor makes, what incentives the State provides, all should be included in the contract. Anyone who violates the agreement should be held accountable. That's the true market-oriented approach.

* A frequently mentioned keyword is "maximum decentralization." However, in reality, the draft still contains many provisions that Ho Chi Minh City must "report," "submit," or "agree upon" with ministries and agencies. How can Ho Chi Minh City truly have its own dedicated railway line, as you mentioned?

- If we want Ho Chi Minh City to soar, we must cut the invisible shackles that bind it. Many National Assembly deputies have proposed a separate law for Ho Chi Minh City. If a law cannot be enacted immediately, I believe that this revised Resolution 98 should include a principled clause: allowing Ho Chi Minh City to proactively pilot new mechanisms and policies that are not yet regulated by law or differ from current regulations.

When implementing these mechanisms, Ho Chi Minh City only needs to report to the Government for supervision, instead of having to seek the consensus of each ministry and agency before proceeding. If it has to wait for the consensus of all ministries according to a "restrictive" process, investment opportunities will be lost.

Granting Ho Chi Minh City special and unique mechanisms is not about favoritism for the city alone, but about creating room for Ho Chi Minh City to contribute more to the whole country. I hope the National Assembly and the Government will bravely "unleash" the city's potential, so that it no longer has to wear a restrictive garment on its journey to reach out to the wider world.

Ho Chi Minh City needs a comprehensive institutional "surgery".

Allow Ho Chi Minh City to proactively pilot policies different from those stipulated in the regulations.

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