Economic hub: People dining along the Saigon River in Ho Chi Minh City. The city with an estimated population of 10 million is considered the business hub of Vietnam. — Bloomberg
HO CHI MINH CITY: Vietnam’s largest economic hub, has unveiled an ambitious plan to seek a total of 172 trillion dong or about US$6.6bil to develop an international financial centre (IFC) over the next five years.
The proposed IFC will be situated in downtown District 1 and part of the Thu Thiem New Urban Area, spanning a total of 783ha.
The overall investment for the IFC is expected to exceed 172 trillion dong.
In the first phase, the city is seeking only 14 trillion dong in addition to two trillion doung sourced from the government revenue to build a core area spanning 9.2ha in the Thu Thiem New Urban Area.
The core area located on the eastern bank of the Saigon River, directly across from downtown District 1 will host government offices, including the headquarters of management agencies, regulatory bodies, and others.
This area is currently undeveloped and designed for technical infrastructure, including roads, electricity, water supply, telecommunications, and lighting.
At present it lacks any buildings or residents.
Thu Thiem has been part of the city’s planning since 1996, covering 930ha, with 770ha allocated for urban development and 160ha for resettlement.
The area is expected have a populationexceeding 200,000 residents.
Nguyen Van Duoc, chairman of the municipal People’s Committee, said the city was well prepared to assume the role of an IFC.
“Ho Chi Minh City, as a major economic hub, achieved a gross regional domestic product (GRDP) of US$73.8bil last year, or 15.5% of the national GDP,” he said.
“Its financial ecosystem comprises over 50% of Vietnam’s fintech startups,” he added.
The city has recently established a steering committee with 29 members for establishing the IFC, chaired by Party secretary Nguyen Van Nen.
The concept of establishing an IFC in the city has been under consideration for several years.
A draft proposal for it envisions a dynamic financial hub that will include a money market, banking system, a capital market, and derivatives trading, among others.
In addition to Ho Chi Minh City, the government also plans to establish an IFC in Da Nang in central Vietnam.
Special mechanisms and policies are expected to be implemented to attract financial institutions, including banks, investment funds, and financial services companies.
Trading platforms for securities, currencies, and commodities will be established at the centres, with a particular emphasis on developing emerging financial sectors such as fintech in accordance with international standards.
The successful establishment of these centres will be key to connecting Vietnam to global financial markets while attracting foreign financial institutions, creating new investment opportunities, and optimising existing resources, experts said.
The centres will also provide high-quality financial services to meet the needs of both domestic and international enterprises.
To effectively develop an IFC, experts recommend Vietnam adopt successful international practices, particularly in emerging sectors such as fintech.
They have also cautioned implementation must be carefully planned and controlled, divided into distinct phases.
Consideration of the potential and competitive advantages of the two cities must also be taken into account, they note.
While the concept of an IFC is common in other countries, it remains quite new in Vietnam. — Viet Nam News/ANN
