-
 SMEs
can rarely find access to land in good locations, nor is there
adequate availability of large- sized plots. Also, since SMEs
are generally not environmentally conscious as they expand their
business, the State prefers to locate them in industrial parks
and zones. Enterprises in certain specific industries must be
located in industrial parks and zones to control environmental
pollution. However, those businesses that do not pollute or harm
the environment should be permitted to establish their premises
wherever they can, including residential areas.
Land planning and zoning still needs a lot of work. Land-use and
zoning plans must be made available to enterprises so that they
can proactively and freely adapt their usage in accordance with
the land zoning plan. The recall of SOEs' unused land is
necessary in principle, but is not easy to implement in
practice. This can only be regarded as a support measure, rather
than a key solution, for increasing the land supply.
The leasing of private land is deemed as a civil contract
transaction, so the State does not intervene except in cases
where the law is violated. The legal framework to regulate
private land transactions is relatively complete. However, due
to ambiguous land zoning, local governments are sometimes
reluctant to permit the conversion of land use.
Mr. Dao Trung Chinh, Deputy Director
of the Land Department, Ministry of Natural Resources and
Environment
-
With the increasing modernization and industrialization of the
nation, land demand for purposes of manufacturing, urban
development, trade and services has presented the administration
with an urgent challenge of how to rationally and economically
utilize the nation's limited land reserve. Therefore, it is
necessary to re-evaluate the efficiency of land use, especially
with regard to publicly-managed land. The immediate task calls
for an audit of land in every province - particularly land used
by government agencies, state enterprises, and socio-political
organizations - and a subsequent recall and reallocation of idle
or misused land for more efficient use. In addition, the land
lease rate for SOEs must be restructured to better match current
market rates. Following these measures, private firms would be
on a more equal footing when seeking access to leased land or
state-allocated land.
Mr. Do Duc Doi, Deputy Director
of the Land Statistics and Registration Department, Ministry of
Natural Resources and Environment
-
 According
to current regulations, businesses can seek access to land in
one of three ways: 1) enter industrial zones - but prices are
too high; 2) sub-lease from land supply development centers
which are yet to be established in all provinces and where they
do exist there is a scarcity of cleared land readily available;
3) sub-lease on the basis of voluntary negotiation but prices
are also high. In Hanoi a land supply development center was
established early, but the limited supply of “cleared land
reserve” was only enough for a few public facility projects and
a few auctions to generate revenue for the city budget. Land for
private sector business and production purposes is not
available.
Private businesses in need of land usually have to sub-lease
unused land from SOEs for a high price and on non-secured terms,
as the lessor can sometimes break a lease agreement if it gets a
better offer. Private sector land holders rarely have land to
sub-lease, and if they do, the plots tend to be small and
unsuitable for factories that employ hundreds of workers.
Mr. Vu Duy Thai, Chairman
of Hanoi Trade and Industry Association
-
From a micro-economic perspective, individual reforms at local
levels cannot create significant improvement in the land supply.
The conversion of agricultural land into manufacturing land must
be in line with the industrialization and development process,
so that redundant labor from agriculture can be employed in
these newly created industrial zones.
On the other hand, land supply in industrial zones remains
abundant, but not all SMEs in Vietnam have the capacity or the
long-term vision to utilize the large area of land that suits
the requirements of industrial zones. Therefore, most of them
opt for utilizing land from household ownership or subleasing
land from other private entities. This results in various
constraints when considering production and capacity expansion
for business development.
We could learn from the example of Korea in establishing
public-private corporations mandated with developing the land
supply. These corporations negotiate to buy land from current
occupants on the basis of market price, and are also authorized
to enforce compulsory measures on resistant occupants. However,
Korea's success can be attributed to its well-established
mechanism of land pricing, which is stable and universally
applied throughout the country. Eventually, it is these
corporations that provide and moderate the supply of land to the
market (businesses and construction projects).
Mr. Tran Nhu Trung, Deputy Director
of the Technology and Environment Consulting Service Company
(TECOS)
-
 Currently,
my business has to sub-lease land from a household for an
average rate of over VND 20 million per year (for a 300 m2
area), renewable every two years. Due to the short-term nature
of the contract and the small area of the land, I could only set
up a temporary establishment for manufacturing and could not
hire more workers; hence my production capacity is limited.
Moreover, because my factory is next to a residential area, the
living environment of neighboring inhabitants is affected. My
business currently needs as much as 3000m2 of land on a
long-term lease. Hopefully we can lease from the state at a
lower rate - usually the state's official rate is only
one-fourth that of private rates.
Ms. Nguyen Thi Chuyen, Chairwoman
of Minh Tam Pottery and Lacquer Cooperative
-
Private firms seeking access to industrial zones usually have
sound development strategies and adhere to environment and waste
processing regulations. However, industrial zones (IZs) are not
for everyone. IZs are not suitable for very small businesses, as
firms must have production capacity that extends over at least
one to five hectares of land to qualify for access.
Mr. Truong Thai Son, Deputy Director General,
Hoang Quan Real Estate Company
-
An accurate assessment of the amount of land actually available
for business use today in comparison to similar indicators in
developed and emerging markets would be useful but is not
possible because the data is lacking. If the SME perception of
scarcity is borne out, efforts should be made to increase supply
by a multi-faceted program which could include such diverse
initiatives as improvements to local physical planning
capabilities and rezoning of lands; resolution of the issue of
SOE-held land; tax-based or other incentives to induce
conversion of more private land rights to higher and better
uses; and reconsideration of the role of government in pricing
lands and intermediating between willing investors and current
right holders.
Mr. Steve Butler, IFC-FIAS consultant on land
-
The problem is that currently many private Vietnamese developers
have the right to develop land and are unable to transfer their
projects to other developers. At the same time, the Government
is hesitant to recall the land from such users. Most Vietnamese
land users do not lease land from the State or others Vietnamese
entities. They prefer to "buy" the land directly. It is foreign
investors that are constrained as they can only lease land from
the State or enter into joint ventures with local partners that
have land to contribute as equity or pay a current land user
compensation to return the land to the State which will then
lease the land to the investor. The Government should change the
law to allow foreign investors to lease land from private
organizations and individuals. I think this is currently not
permitted because the Government is concerned about improper use
of land. However, to the extent each investor must obtain an
Investment Certificate, whether the use is proper can also be
determined by the licensing authority.
Ms. Dao Nguyen, Partner,
Johnson Stokes & Master Vietnam & Chair of the Vietnam Business
Forum Working Group on Land Issues
>> More...
|
