Perfecting the institutional framework for Ho Chi Minh City to make a breakthrough - Part 1: The key to realizing growth targets

On November 24, the National Assembly Standing Committee gave its opinion on the National Assembly's Draft Resolution amending and supplementing a number of articles of Resolution 98/2023/QH15 of the National Assembly on piloting a number of specific mechanisms and policies for the development of Ho Chi Minh City (referred to as Resolution 98).

Editor's note: After more than 2 years of implementation, Resolution 98/2023/QH15 of the National Assembly on piloting a number of specific mechanisms and policies for the development of Ho Chi Minh City (referred to as Resolution 98) has brought about many clear results, helping the city's economy recover and grow strongly. However, after the reorganization, Ho Chi Minh City needs a more complete institutional framework to resolve existing problems in the face of new development requirements. The amendment and supplementation of Resolution 98 will contribute to helping Ho Chi Minh City realize its "double-digit" growth target, becoming the leading locomotive and growth nucleus of the whole country.

Previously, the Government had a proposal to "upgrade" Resolution 98 in a shortened order, showing that this is an urgent task, for Ho Chi Minh City to break through and fulfill its pioneering mission, leading the development of the whole country. SGGP reporter had an interview with Associate Professor, Dr. Tran Hoang Ngan, National Assembly delegate (Ho Chi Minh City Delegation), about this issue.

* REPORTER: Regarding the Government's proposal to submit to the National Assembly for consideration of "upgrading" Resolution 98 in a shortened order, what is your comment on this proposal?

* Assoc. Prof. Dr. TRAN HOANG NGAN: After the merger, Ho Chi Minh City has expanded its development space to become the leading growth and innovation pole of the country. The economic scale (GRDP) of Ho Chi Minh City is estimated at 3.03 quadrillion VND (equivalent to 123 billion USD), accounting for 23.5% of the country's GDP. Ho Chi Minh City is also the largest financial center of the country and is expected to have a budget revenue of about 750,000 billion VND in 2025, accounting for about 36.7% of the total national budget revenue.

Associate Professor, Dr. Tran Hoang Ngan, National Assembly delegate (Ho Chi Minh City Delegation) gave comments on amending Resolution 98.
Photo: CAM NUONG

This new stature requires a superior legal framework to resolve urgent bottlenecks while creating conditions for the city to develop. Specifically, Ho Chi Minh City is facing many major problems such as traffic congestion, flooding, urban planning and implementation, requiring a mechanism capable of solving them fundamentally.

At the 1st Congress of the Ho Chi Minh City Party Committee, General Secretary To Lam emphasized that the city's top priority is to complete the planning and re-architect the development space according to the multi-polar - integrated - connected thinking, operating according to the multi-center governance model. This is a new issue of decisive significance; the longer it is delayed, the more opportunities for development will be lost for Ho Chi Minh City.

Therefore, I think that the Government's submission to the National Assembly of the Draft Amendment and Supplement to Resolution 98 in a shortened order is very necessary, addressing urgent practical requirements, helping Ho Chi Minh City fundamentally remove limitations in urban management and development; at the same time, mobilizing and promoting all resources for the city to realize its growth target and contribute more to the whole country.

* What is the significance of these amendments and supplements for Ho Chi Minh City in operating the two-level local government model to better serve the people and businesses, sir?

* First of all, it must be affirmed that the 2-level local government model is a turning point in governance, moving towards a streamlined - compact - strong - efficient - effective - efficient apparatus. Especially for Ho Chi Minh City, the 2-level local government model with more decentralized and stronger delegated contents is very necessary to operate the megacity according to the mindset of "1 center, 3 regions, 1 special zone".

The proposed amendments and supplements to Resolution 98 have many contents focusing on cutting down and simplifying procedures, creating favorable conditions for investors, businesses and management agencies. The draft also proposes to strengthen decentralization and authorization to increase the initiative and creativity of Ho Chi Minh City in many fields. That is, allowing Ho Chi Minh City to decide on land use targets, approve planning, select investors or carry out procedures according to a shortened process, especially for projects in key areas, industrial parks, export processing zones, high-tech zones, economic zones, free trade zones...

This will help Ho Chi Minh City proactively and quickly resolve issues arising from practice, attract investment and implement governance models with the characteristics of large cities. Reducing intermediaries and shortening the time to complete procedures is to follow the motto "close to the people", improving the efficiency of serving people and businesses, as the goal of the 2-level local government model.

* What is the breakthrough point in the proposal to "upgrade" Resolution 98 to create new development momentum for Ho Chi Minh City?

* There are two strategic breakthroughs. The first is the proposal to add outstanding incentive policies, attractive enough to attract strategic investors to participate in large projects, playing a key role in the development of urban infrastructure, logistics, key transportation... with large scale, up to 75,000 billion VND.

In the period 2026-2031, Ho Chi Minh City determined the average GRDP growth rate to be 10%-11%/year and total social investment capital to be 35%-40% of GRDP. Meanwhile, in 2026, Ho Chi Minh City approved a development investment budget of only 144,000 billion VND, but the actual demand is 700,000-800,000 billion VND.

Thus, Ho Chi Minh City must mobilize social capital of about 600,000-800,000 billion VND/year to meet development needs. To achieve this huge number, attracting and selecting strategic investors is extremely important. Adjusting policies to attract large corporations with modern financial, technological and management capacity, promoting the development of synchronous and modern urban infrastructure, and improving the quality of life of the people is very important.

The second is to establish a legal framework for a new development model, the Free Trade Zone (FTZ) of Ho Chi Minh City. This is a mechanism of strategic significance, allowing Ho Chi Minh City to experiment with a comprehensive institution, with superior policies on procedures, tax policies and investment incentives, customs and logistics mechanisms to form a new "super pole" of growth associated with the seaport in the Cai Mep Ha area. An institution with a sufficiently large "openness" will bring advantages to Ho Chi Minh City in attracting capital flows and global value chains.

* How will the revised transit-oriented urban development (TOD) mechanism create financial incentives?

* Developing a synchronous transport infrastructure, especially the urban railway system (metro) and belt routes, is one of the important strategic breakthroughs. However, the budget resources allocated for development investment in the next 5 years can only meet about 30% of the city's needs. The proposal of innovative financial mechanisms related to TOD is to create favorable conditions for Ho Chi Minh City to implement the project.

The newly proposed TOD policy also creates conditions for the development of multifunctional urban areas synchronously around transport infrastructure, mobilizing investment capital and ensuring synchronous technical and social infrastructure. In particular, Ho Chi Minh City takes revenue from the increase in land value (planning rent) to reinvest directly in the infrastructure system that creates that value, forming a self-contained, closed and sustainable financial model.

In addition, allowing Ho Chi Minh City to decide to invest in construction combined with housing, commercial service and public works along important traffic routes will promote multi-functional urban development around traffic infrastructure, create new GRDP and directly contribute to reducing traffic congestion and improving the quality of urban life.

* Why is "upgrading" Resolution 98 both necessary for Ho Chi Minh City and meaningful for the whole country, sir?

* The proposal to amend and supplement Resolution 98, in my opinion, has at least three important reasons.

Firstly, Ho Chi Minh City has long been the growth pole and the innovation pole of the whole country. Many policies and mechanisms, after being successfully piloted in Ho Chi Minh City, have been summarized and issued by the Central Government for wide application nationwide. In the current context, the proposal to "upgrade" specific mechanisms and policies that are sufficient to solve bottlenecks when successful in the megacity of Ho Chi Minh City, the Central Government will have practical evidence of "policy testing" before expanding to other localities.

Second, public spending and social investment in Ho Chi Minh City are large-scale and have strong spillover effects. The mechanism of allocation and reward for excess revenue according to specific mechanisms and policies alone will create more investment resources for the city to develop and contribute more to the region and the country.

Third, Ho Chi Minh City does not ask for more money, but only asks for a strong enough mechanism for the city to proactively mobilize social resources, effectively exploit land funds, and create new value from infrastructure and public services. Currently, among the 6 localities that have budget adjustments to the Central Government, the budget adjustment rate that Ho Chi Minh City will enjoy in 2026 is the lowest: 25% (Hanoi: 32%, Quang Ninh: 51%, Dong Nai: 59%, Da Nang: 83%, Hai Phong: 84%).

Ho Chi Minh City is always for the whole country, with the whole country and Ho Chi Minh City also needs the Central Government to support a strong enough outstanding mechanism to attract social resources for development investment, especially investment in synchronous economic and social infrastructure, to promote its potential and advantages, accelerate development and contribute more to growth and total budget revenue for the whole country.

Performed by KIEU PHONG - NGO BINH

Source: https://www.sggp.org.vn/hoan-thien-khung-the-che-de-tphcm-but-pha-bai-1-chia-khoa-hien-thuc-hoa-muc-tieu-tang-truong-post825284.html