mobilize investment capital for socioeconomic development of ethnic minorities and mountainous regions of vietnam from 2010 to 2020

VIETNAM ACADEMY OF SOCIAL SCIENCE
GRADUATE ACADEMY OF SOCIAL SCIENCES
NGUYEN VAN DUNG
MOBILIZE INVESTMENT CAPITAL FOR SOCIOECONOMIC DEVELOPMENT
OF ETHNIC MINORITIES AND MOUNTAINOUS REGIONS OF VIETNAM FROM
2010 TO 2020
Major: Economic Management
Code: 62.34.04.10
BRIEF OF ECONOMIC PHD THESIS

HA NOI - 2014
The work has been completed at:
VIETNAM ACADEMY OF SOCIAL SCIENCE
GRADUATE ACADEMY OF SOCIAL SCIENCES
Supervisors:
1. Assoc. Prof, PhD. Duong Van Sao
2. PhD. Tran Minh Yen
Opponent 1: Assoc. Prof, PhD. Quach Đuc Phap
Opponent 2: Assoc. Prof, PhD. Bui Quang Tuan
Opponent 3: Assoc. Prof, PhD. Nguyen Đinh Long
The thesis will be defensed before the Assessment Board of the Academy at Graduate
Academy of Social Sciences at……………… 2014.

The thesis can be read at:
- National Library
- Library of Graduate Academy of Social Science
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INTRODUCTION
1. Urgency of the topic
Vietnam has more than 54 ethnic groups, including 53 ethnic minorities equal to
14.3% of the national population. The population lives mostly in 52 povinces and cities.

Ethnic minorities and mountainous regions of Vietnam cover ¾ area of the nation and have a
lot of advantages and potential in agriculture, forestry, hydropower, mines, tourism, import
and export and ecological environment.
Recognize the importance, Vietnamese Party and State have had many guidelines and
policies to invest into ethnic minority and mountainous regions. It has resulted in many
improvements in physical and spiritual life of minority and mountainous peoples. The proportion
of the poor has been reduced remarkably. Socio-economic infrastructure has been strengthened.
Education and training have gained lots of achievements. Health care has been better and better.
Cultural characters of peoples have been preserved and improved. National defense, security and
social order have been guaranteed. The above achievements show the consistent policies and
intensive take-care of Vietnamese Party, State and the whole political system and contribution of
all people to the socio-economic development of ethnic minorities and mountainous regions.
However, beside the said achievements, ethnic minorities and mountainous regions
still have many problems such as low level of socio-economic development, high disparity in
comparion to other regions, and higher rate of the poor and nearly poor households than the
overall average of the country. One of the vital reasons of the above problems is lack of
capital to develop, especially in the Northern midland and mountainous regions. The problem
is becoming a huge abstract to socio-economic development of the region. This is not only my
private concern but also the general preoccupation of scientists and managers at all levels
from the Center to locals to exploit the available potentials of the region to serve the
industrialization and modernization of the country.
From these problems, in the study “Mobilize investment capital for socio-economic
development of ethnic minorities and mountainous regions of Vietnam from 2010 to 2020”,
I choose “Mobilize investment capital for socio-economic development of Northern midland
and mountainous regions and Central Highlands of Vietnam from 2010 to 2020” because
these are two most typical areas. Choosing two regions to do PhD thesis is reasonable and
necessary.
2. OVERVIEW OF THE STUDY
- In the world
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Many scientists spent a lot of time in studying about capital, investment and mobilization
of investment capital and came to important conclusions. In the work “The Wealth of Nations”
(1776), Adam Smith affirmed: “Saving is the direct cause of capital increase. Working makes
product for saving. However, even a lot of products are made, no saving means no capital
increase”. According to C. Mac’s opinion in the work “Capital”, saving is the rule of broadened
reproduction. To broaden reproduction, input factors need to be strengthened, that means capital
should be invested”. In a famous work of John Maynard Keynes, “The General Theory of
Employment, Interest and Money”, he improved that it is investment that equals amount of
income which is not transferred into expenditure. At the same time, he also showed that saving is
the surplus of income more than expenditure.
In recent years, ethnic minority and mountainous have attracted much concern of
international organizations as the World Bank, UN Development Program, etc., to investigate
and invest in socio-economic development to reach the goal of poverty reduction.
- In Vietnam: (1) scope of economy; (2) scope of ethnic minority and mountainous areas.
Studies on scope of economy focus on public investment, capital mobilization for
development investment and ODA and FDI mobilization. Those on scope of ethnic minority
and mountainous areas focus on summarizing the implementation of investment policies for
the regions, assistance poplicies for development of economy, culture and society and poverty
reduction, analyzing current situation, shortcomings and reasons of the shortcomings,
proposing methods to mobilize capital for socio-economic development in ethnic minority
and mountainous areas. The studies approached and researched about capital and other
resources for socio-economic development in ethnic minority and mountainous regions at
various levels. From that, they suggested many new useful study directions.
3. Objectives of the study
- Systematize a number of theoretical and practical issues on mobilization of
investment capital for socio-economic development, some issues on theories of investment,
forecasting capital needs, and some theories of regional development. The study also
investigates some experience in capital mobilization for investment and development and
regional development policies of several nations in the region and in the world that can be
applied into Vietnam.

- Analyze and evaluate the current situation of capital mobilization for socio-economic
development of the Northen midland and mountainous regions and Central Highlands from
2001 to 2010, result of capital mobilization, development trend of capital resources, impacts
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of investment capital on economic growth, economic structure movement, budget, and import
and export of the regions in stage 2001-2010.
- Analyze to clarify relationships and factors (natural conditions, economy, society,
culture, etc.,) affacting to capital mobilization for socio-economic development of the regions;
the relationship between the result of capital mobilization and subject using the capital.
- Propose solutions that are feasible and synchronous on investment policies to
mobilize the highest amount of investment capital for socio-economic development of the
Northen midland and mountainous areas and Central Highlands of Vietnam upto 2020.
4. Object, scale and lcation of the study
- Objetc of the study: to mobilize investment capital for socio-economic development
of the Northen midland and mountainous areas and Central Highlands of Vietnam upto 2020.
It will show the most typical characters of “Mobilization investment capital for socio-
economic development of ethnic minority and mountainous regions Vietnam from 2010 to
2020”.
- Scale of the study
+ Temporal scale: analyze and evaluate the real situation of capital mobilization of the
regions from 2001 to 2010; solutions to mobilize capital for the regions upto 2020.
+ Spatial scale: The study is implemented at 2 regions: the Northen midland and
mountainous region and Central Highlands. These are 2 typical regions for ethnic minority
and mountainous areas of Vietnam.
5. Study method
- Methodology: based on the scientific perspectives of Marxism – Leninism, methodology
of dialectical materialism and historical materialism, the views and policies of Vietnamese Party
and State, economic theories, socio-economic policies and regional development theory, etc.
- Study method: (1) Information collection; (2) Comparision; (3) Group to statistics;
(4) Inheritance; (5) Expert; (6) Forecast.

6. Contributions of the thesis
- This is the first systematic study researching in-depth in: investment, development
investment, capital, capital mobilization for socio-economic development; theory of
investment and forecasts of socio-economic development capital demand, regional
development theory, problems of raising investment capital for regional socio-economic
development and regional problems and ethnic minority and mountainous areas in Vietnam.
4
- The thesis analyzes and assesses the status of capital mobilization for socio-
economic development of the Northen midland and mountainous region and Central
Highlands in th period 2001 - 2010; analyzes and assesses achievements, limitations, reasons
of the limitations, lessons and the question of capital mobilization for socio-economic
development; and analyzes relationships and the factors (natural conditions, socio-economic
conditions, policies and mechanisms to mobilize capital, etc.) that influence to result of
capital mobilization from 2001 to 2010.
- The thesis provides more scientific basis to propose solutions of investment capital
mobilization to develop economy and society in the Northen midland and mountainous area
and Highland of Vietnam to 2020.
7. Structure of the thesis
Beside introduction, conclusion, references and appendixes, the thesis includes 3
chapters:
Chapter 1: Theory and the fact of mobilization of regional socio-economic
development capital.
Chapter 2: The real situation of capital mobilization for socio-economic development
in the Northen midland and mountainous region and Central Highlands.
Chapter 3: Solutions to mobilize investment capital for socio-economic depvelopment
of the Northen midland and mountainous region and Central Highlands of Vietnam upto
2020.
CHAPTER 1
THEORY AND THE FACT OF MOBILIZATION OF REGIONAL SOCIO-
ECONOMIC DEVELOPMENT CAPITAL

1.1. Theory of socio-economic development capital
- The thesis presented concept of investment and development investment. The author
specializes in researching development investment with the following issues: (1)
Characteristics of development investment; (2) Basic information of development investment;
(3) Investment capital and capital resource; (4) The role of development investment with
growth and development (impact on aggregate supply and aggregate demand of economy, on
economic growth, on economic structure movement, on science and technology, on social
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improvement and on environment and impact of economic growth and development on
investment)
- Some theories on investment: investment multiplier, internal fund theory of
investment, Harrod-Domar model; All theories on investment which are applied have
concerning to socio-economic development investment capital. This is an abundant issue. For
this reason, the thesis chooses the Harrod – Domar model to forcast the demand of
development investment capital. It gives a foundation to define total demand of capital for
regional development and economy development in a certain period. From that, the thesis
finds down duties and builds solutions to mobilize investment capital for the development of
whole economy as well as each region.
1.2. Theory on regional socio-economic development
- The thesis gives some concepts: region, regional economy, socio-economic region, ethnic
minority and mountainous region, regional socio-economic development.
- Some theories concern to regional development: (1) Theory of regional; (2) Theory
of regional development stages; (3) Selection of the motivative field in regional development.
There are quite many hypotheses about regional growth. However, in the framework of the
thesis, the autor only mentions to the theories that relate to resources and function as the
foundation to build solutions to mobilize regional development capital. The theories can be
referred or applied. Regional study is affected by the following factors: natural conditions
(natural resources, geographical position); investment capital; labor; science and technology;
cooperation (shows association ability of the region); socio-economic infrastructure; and
policies.

1.3. Theory on mobilization of regional socio-economic dvelopment capital
- The thesis gives some theories on mobilization of regional socio-economic
development capital. With different positions, different objects and different characteristics,
types of capital mobilization can be classified as follows: (1) Classify according to the
mobilization sources; (2) Classify according to scope of mobilization sources; (3) Classify
according to mobilization time; (4) Classify according to mobilization forms.
- The indicators reflecting investment capital mobilization of socio-economic
development are reflected through the volume target, structure of capital investment and
efficiency of regional socio-economic development capital: for investment projects, it must be
considered from two angles, the investor and the economy. With economic scope, industries,
regionsl or locals, economic and social effectiveness is assessed through criteria: economic
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performance, growth of total GDP, the economic restructuring, budget increase, increase of
foreign exchange earnings or export turnover than investment capital having effectiveness in
researching period. Social performance: employment, poverty reduction, social and cultural
development, etc.
- The relationship between capital mobilization sources and capital users: the study
defines clearly that the relationship not only helps managers set forth resolutions to increase
effectiveness of capital using but also help policy makers give effective methods to enhance
capital mobilization for socio-economic development.
Investment capital for socio-economic development includes:
- Dometic capital: A part of total GDP is used for expenditure. The rest is saved. A
piece of the saved part is used to pay debt and backup. The other part is used for socio-
economic development. Savings in residential and non-state enterprises is divided a part for
business and production, a provision for bringing in bank credit or financial intermediaries.
Moreover, investment capital is also mobilized from non-state enterprises and people’s
contribution through public labor days.
+ Foreign capital: including the oficial development assistance and direct investment
into Vietnam (ODA and FDI).
- Factors affacting to the mobilization of regional socio-economic development capital

includes: natural, economic and social conditions, regional and international integration,
mechanisms and policies on regional development; role of gavement at all levels from the
center to local; and national defense and security.
1.4. Experience in capital mobilization for development of several nations
The thesis has shown experience in capital mobilization in Korea, China and ASEAN.
These are lessons for Vietnam to develop investment policies and management methods and
allocate socio-economic development investment capital.
1.5. Experience in organizing regional apparatus and regional development policies of
some countries
The thesis has shown experience in organizing regional management apparatus and
regional development policies of several nations in the world. These are lessons for Vietnam
to organize regional apparatus and pay attention to natural conditions, geographic position,
development level and socio-economic factors when planning regional development policies.
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CHAPTER 2
THE REAL SITUATION OF CAPITAL MOBILIZATION FOR SOCIO-ECONOMIC
DEVELOPMENT IN THE NORTHEN MIDLAND AND MOUNTAINOUS REGION
AND CENTRAL HIGHLANDS
2.1. Natural, socio-economic and defense characteristics have impacts on capital mobilization at
the Northen midland and mountainous area and Central Highlands
- The thesis has presented natural, socio-economic and defense characteristics
affacting to capital mobilization of the Northen midland and mountainous area and Central
Highlands with the following typicals: (1) This is a vast region with area of 94.862 km
2
(
account for 29% of whole nation area), special defense position, abundant natural resources
(forest, soil, water, mine), and difficult and dissected terrain by block of mountains running
according to northwest - southeast direction. Hoang Lien Son ranges to 180 km long, 30 km
wide, with a number of high peaks from 2800 to 3000 m. It has very harsh climate: in winter,
hoar frost and very low temperature appear at, especially at high mountains. In summer, there

are many storms, whirlwinds, floods and flood tubes, hail, etc., causing landslides leading to
many difficulties for production and life; (2) About economy: Average economic growth at
all period 2001-2010 was 8.7 %; economic structure had a positive change, agriculture rate
decreased from 39.0 % in 2001 to 35.1 % in 2005 and 30.5 % in 2010, similar to industry and
construction increased from 31.1 % to 32.1 % and 33.0 %, services increased from 30.0 % to
32.8 % and 36,5 %; (3) About society and culture: population is 11,053,545, accounting for
12.9 % of the national population. In which, there are 6,034,224 people of ethnic minorities,
making up 54.6 % of the region population. There are 49 peoples living together. The largest
is Tay, Thai, Nung, Muong, H'mong; culture and language of Tay, Nung, Thai, Muong, Mong
affect to the regional culture. Labor accounts for 49.5 % of the population; untrained workers
account for 80.5 %. Health care and education have improvement of both quantity and
quality. Material and spiritual life of the people are increasingly improved.
- The thesis presented natural, socio-economic and national security characteristics
having impacts on capital mobilization of socio-economic development in the Central
Highlands with features as follows: (1) The Central Highlands is a plateau with abundant
natural resource. It has an important strategic position on national security with an area of
54.659 km2 and natural tropical monsoon climate plateau, is divided into two seasons: rainy
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season from May to October with humid and cool climate and dry season from November to
April with dry and cold climate. The average temperature is about 19 - 20
0
C. (2) About
economy: economic growth rate in 2001-2010 period was 8.6 %. The economic structure had
positive changes; agriculture's share decreased from 54.7 % in 2001 to 52.3 % in 2005 and
51.1 % in 2010, similar to industry and construction increased from 16.4 % to 19.0 % and
22.0 %; services increased from 28.9 % to 28.7 % and 26.9 %. (3) About society and culture:
population is 5,115,135, accounting for 5.95 % of the national population. There are
1,805,226 ethnic people accounting for 35.3 % throughout the region. There are 46 peoples
living intertwinedly. The largest is Jarai, Ede and Bana. Jarai, Ede and Bana culture and
language affect to the regional culture; population density is 98 people/ km2. Untrained

workers account for 82.08 %, which is a large obstacle to socio-economic development of the
region. Health care and education are paid interest to invest; people's life is gradually
improved.
2.2. The real status of capital mobilization for socio-economic development in the
Northen midland and mountainous region and Central Highlands from 2001 to 2010
2.2.1. Policies relating to the mobilization of investment capital for the Northen midland
and mountainous region and Central Highlands
Vietnamese Party and State have priority concern for investment into ethnic minority
and mountainous regions through a variety of policies in all fields of economics, politics,
culture, society, security and defense. In the period 1999-2005, there were 86 writtens of the
Government, the Prime Minister and the ministries and central agencies issued and
implemented for the minorities and mountainous regions. In the period from 2006 to 2012,
investment policies for ethnic minority and mountainous areas were presented in nearly 160
institutions with legal documents including: 14 decrees of the Government, 40 decisions of
the Prime Minister; 27 documents on approving schemes and policies; 26 joint documents
between the ministries, ministerial-level agencies and 51 documents of ministries, ministerial-
level agencies. Besides, based on the actual situation, the locals built and promulgate actively
policies for the investment into minority and mountainous regions.
Investment policies for ethnic minority and mountainous regions are changing basically and
nearer and nearer to the actual. It is from the policy of direct support in major to both development
investment and direct support. Location and objects in policy system also have important changes,
from “easy first, difficult later” to priority to invest and support for the most difficult areas and the
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poorest districts in the program fast and stable poverty reduction of 62 poor districts (Resolution 30a).
Nowadays, Vietnam has 85 poorest districts.
Continouing the first stage of Program 135, policies in the second stage from 2006 to
2010 focused on resolving the most difficult and imperative problems for ethnic minority and
mountainous regions to speed up the region, such as: Invest into infrastructure of particularly
difficult hamlets and villages (Program 135 stage II); policy of supporting living land,
production land, living house and household water for ethnic minority community having

poor life (Decision 134, Decision 1592), policy of supporting in doing houses (Decision 167),
policy of lending capital (Decision 32 ans Decision 1342), policy of supporting to settle
agriculture (Decision 33 and Decision 1342), etc. Together with support policies for
development, there are plolicies promulgateenclosed with Decision 24, 25, 26 and
27/2008/QD-TTG ensuring combine socio-economic development with security and defense
of these regions, border regions, revolutionary base areas and safety zones. The policies for
some ethnic minorities such as Brau, Ro Mam, O Du, Si La, Pu Peo, Sewer, Arrays, La Hu,
Co Lao and the investment policies for agriculture and rural development, education training,
medical care for the people, culture, sport, etc., create a relatively comprehensive policy
system, covering the areas around the economics, society, security and defense. The policies
are a positive factor to impact on regional development capital raising of minorities and
mountainous regions in general and the Northen midland and mountainous region and Central
Highlands in particular.
2.2.2. Result of capital mobilization for socio-economic development
2.2.2.1. Social investment capital for socio-economic development nationally and regionaly
The statistics of social capital by region certain disparities between regions. Central
Highlands has lowest proportion of structural social capital in the whole country. In period
2001-2010, total investment capital was 181.679 billion, accounting for 4.2 %; similarly, next
to the Northen midland and mountainous regions with 369.159 billion, accounting for 8.5 %
and the Mekong delta region was 609.680, accounting for 14.1 %, North Central and South
Central Coast was 911.778 equal to 21.0 %, the Red River delta was 1074836 equal to 24.7
%. 27.4% was the South East with 1.190.007 billion. Areas with difficult socio-economic
conditions have lower propotion than those are more developed (the South East region
accounted for the highest percentage, 27.4 % in the 2001-2010 period, Red River Delta
accounted for 24.8 %, the Central Highlands, the Northen midland and mountainous region
had the lowest rate, respectively, 8.5 % and 4.2 %) .
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The main causes of the above condition are poor infrastructure, difficult transportation, far
away markets, and low quality of human resources, less attractive investment environment. These
are the major causes making investors do not invest much capital for socio-economic development

of the Northen midland and mountainous regions and Central Highlands.
2.2.2.2. Mobilize according to socio-economic development investment capital of the Northen
midland and mountainous areas and Central Highlands
- Mobilize according to socio-economic development investment capital of the
Northen midland and mountainous areas. Total investment capital for the period 2001-2010
is 369.159 billion, in which, 150.567 billion if from budget, accounted for 43.3%, similar to
the state credit is 46.509 billion and 11.9%, state-owned capital is 18,500 billion and 6.4%
and that of non-state sector is 313.236 billion and 32.6%. FDI is 22,801 billion, accounted for
5.9%.
- Mobilize investment capital according to Central Highlands. Total investment
capital for the period 2001-2010 is 181.679 billion, in which, 57.039 billion if from budget,
accounted for 31.7%, similar to the state credit is 36.855 billion and 20.6%, state-owned
capital is 16.838 billion and 7.7% and that of non-state sector is 66.681 billion and 36.5%.
FDI is 6.275 billion, accounted for 3.6%.
2.2.2.3. Capital mobilization for economic sectors
In the period from 2001 to 2010, total mobilized investment capital of the Northen
midland and mountainous region reached 369.159 billion VND, including 30.516 billion
VND invested in forestry and aquatic production, accounting for 8.3%; 125.478 billion
invested in industry and construction, accounting for 35%. Trading and services was 213.165
billion and 57.7%. The Central Highlands respectively was
181.679 billion VND; 47.590 billion
and 26,2%; 64.792 billion and 35,7%; 69.297 billion and 38,1%.
2.2.3. Impacts of investment capital to socio-economic development of he region
The thesis presents the impact of investment capital to economic growth, to economy
restructuring, to the budget revenues, to solution and creatation of new jobs for workers, to
export turnover, and to the implementation of poverty reduction goals.
2.3. Overall assessment
2.3.1. Achievements
The results of raising capital have met the basic requirements of socio-economic
development and economic growth promotion (annual average growth rate of the Northen

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midland and mountainous region is 8.7% and the Central Highlands is 8.6%), while
contributing to restructure economy towards industrialization and modernization, increase
gradually the share of industry and construction, services, reduce the share of agriculture,
forestry, fishery, mining all potentials of the region. Infrastructure (electricity, roads, schools,
stations, irrigation, etc.,) has been increasingly improved; the face of rural mountain areas have
had a positive change. The investment environment has been improved; economic sectors have
increasingly growed; non-state and private enterprises are proactive to invest in production and
trading, contributing to economic and social development of ethnic minority and mountainous
areas.
2.3.2. Limitations
The first, mechanisms and policies to mobilize investment capital still are insufficient:
we have issued a number of guidelines and policies, including specific policies, but not strong
enough to create an attractive investment environment to attract investors at home and abroad.
The second, economy and society develop slowly. Interregional and internal
combination is not good.
The third, planning work: residential, urban, towns and townships, transportation,
water resources, mineral resources, mining, hydropower construction, airports, ports, etc., still
reveal many shortcomings.
The fourth, distribution of human resources and combination of programs and projects
is not rally good.
The fifth, organizational structure and staffs working in the field of investment have
man shortcomings.
The sixth, investment management work has been sleckened.
2.3.3. Causes of the limitations
- Objective reasons: (1) The regions have vast area, rugged and complexly bisected
terrain, severe weather , frequently affected by natural disasters, floods, "double disaster" and
Vietnam is considered as one of the five countries affected most by global climate change.
Annual losses are huge and put negative impact on the life and production of people. After
floods, many households have nothing left; many traffic and irrigation works were destroyed.

Every year, Vietnam has about 15-18 small and large storms and losses of 1.5 % of GDP,
with almost 1,000 people were killed. (2) Due to historical factors with low socio-economic
starting point, rag and backward infrastructures that cannot meet the requirements of
development. Quality and educational level of human resources are low. The majority are
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agricultural and untrained workers, lack of skilled labor and technical experts, good managers.
This is a huge barrier to economic and social development; (3) The complicated situation in
the world of politics, religion, ethnicity , climate change, economic crisis, etc., have impacted
negatively on the socio-economic development of minorities in general and the Northen ethic
minority and mountainous region and the Central Highlands in particular .
- Subjective reasons: (1) The coordination between ministries and agencies from the
central to local levels in advising organizations develop and implement policies is inadequate;
the civil service at all levels was heavy and inefficient. Administrative procedure has
improved but is still cumbersome; support measures, investment incentives are not strong,
clear, lack of transparency, promotion of investment is weak, (2) The loose review, inspection
and supervising of the implementation of plans resulted in the discretion at the local level, the
regional ministries, occuring overlapping phenomena, disrupting regional and territorial
planning, wasting resource development; (3) A part of officials also thought people are
dependent on capital investment from the State, not actively stimulate and promote the good
of the local resources .
2.4. Lessons and the problems of investment capital mobilization at the regions
2.4.1. Experimental lessons of capital mobilization for regional socio-economic
development
Firstly, it is necessary to have participation of all political system and mobilize all
resources into development investment.
Secondly, create general community agreement.
Thirdly, assess properly the situation and determine the location, focuse investment in
key points - such as the poorest and the most difficult communes or districts. Need to raise
capital and invest in the most critical issues.
Forthly, steering and management work of central and local agencies.

Fifthly, practice indicates that we need to build key socio-economic areas and satellite towns
of the mountain areas.
Sixthly, enhance social criticism in all investment processes.

2.4.2. Raising problems
The first cut-off point is the insufficiency in infrastructure and human resource
quality.
The second cut-off point is the absorbability of investment capital.
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Thirdly, the regions have important strategic position on economics, politics, culture,
security and defense.
Forthly, enhance the combination between enterprises, locals in the region and
between regions.
Fifthly, it is necessary to research to build key areas, important urban, key economic
regions with appropriate scale and specific policies for each region: The Northen midland
and mountainous region and the Central Highlands.
CHAPTER 3
SOLUTIONS TO MOBILIZE INVESTMENT CAPITAL FOR SOCIO-ECONOMIC
DEPVELOPMENT OF THE NORTHEN MIDLAND AND MOUNTAINOUS REGION
AND CENTRAL HIGHLANDS OF VIETNAM UPTO 2020
3.1. Opinions and targets of socio-economic development for the Northen midland and
mountainous region and the Central Highlands of Vietnam to 2020
To integrate into the country, the region is interested by the Party and State to invest to
exploit the available potentials of natural resources, socio-culture and human. It sets out the
development opportunities and challenges, the basic and usually requirements to investment
capital mobilization in Vietnam in general and in the region in particular.
The task of socio-economic development of the Northen midland and mountainous region
and the Central Highlands is entering a period of new strategies in the context of the world is
changing very fast, complexly and unpredictably. Peace, cooperation and development continue to
be the common trend but ethnic conflicts, religious, resources and territory struggling and terrorism

may increase with other global issues such as poverty, disease, climate change and natural disasters.
The hostile forces in-door and out-door have not lost the plot of peaceful evolution, causing riots,
toppled, using the guise of democracy, human rights, ethnic, religious to combat revolution and
prevent the path to the socialism of Vietnam.
3.1.1. Opinions and targets of socio-economic development for the Northen midland and
mountainous region to 2020
Strive to maintain a growth rate higher than the general rate of economic development
of the country; markedly and uniform improvement of socio-economic infrastructure system
14
to better meet the requirements of economic development, people's livelihood and ensuring
national defense and security; specific objectives for regional development, table 3.1 belows:
Table 3.1. Project to develop the Northen midland and mountainous region upto 2020
Target Unit
2010
(original)
2015 2020
I. General target
1. GDP (ghh) Billion VND 142.469 204.800 301.100
- Agricultural, forestry and
aquatic products
” ” 43.453 55.300 65.800
- Industry – Construction ” ” 47.014 69.800 116.500
- Services ” ” 52.002 79.700 118.800
2. Increase speed in stage
(1)
% 7,5 8,0
- Agricultural, forestry and
aquatic products
4,5 4,0
- Industry – Construction 8,3 10,8

- Services 9,2 8,0
3. Economy structure % 100 100,0 100,0
- Agricultural, forestry and
aquatic product
% 30,5 27,0 21,9
- Industry – Construction % 33,0 34,1 38,7
- Services % 36,5 38,9 39,4
Source: The author calculates basing on [113], (PL 6.1).
Note: (1) Increase speed in the stages 2011-2015, 2016-2020
3.1.2. Opinions and target of socio-economic development in Central Highlands upto 2020.
Try to develop society and economy comprehensively, make Highland become the
motivative region of the whole country step by step, increase people’s physical and spiritual
life continuously, protect ecological environment, and ensure national defense.
The detailed targets are presented in Table 3.2 belows:
Table 3.2. Development project of Central Highlands to 2020
Target Unit
2010
(original)
2015 2020
1. GDP (ghh) Billion VND 87.344 127.900 193.800
- Agricultural, forestry
and aquatic product
” ” 44.633 55.770 67.250
- Industry – ” ” 19.216 37.350 67.830
15
Construction
- Services ” ” 23.496 34.780 58.720
2. Increase speed in
stage
(1)

% 7,9 8,7
- Agricultural, forestry
and aquatic product
3,8 8,7
- Industry –
Construction
14,3 12,7
- Services 9,4 9,8
3. Economy structure % 100 100,0 100,0
- Agricultural, forestry
and aquatic product
% 51,1 43,6 34,7
- Industry –
Construction
% 22,0 29,2 35,0
- Services % 26,9 27,2 30,3
Source: The author calculates basing on [110], (PL 6.2).
Note: (1) Increase speed in the stages 2011-2015, 2016-2020
3.2. Duty of mobilizing socio-economic development investment capital for midland and
mountainous region and Central Highlands of Vietnam upto 2020
Pursuant to opinions and development targets of the Northen midland and mountainous region to
forecast capital demand of the region:
Table 3.3. Prediction of capital demand for the Northen midland and mountainous
region from 2011 to 2020 according to economic sectors
Item
2011-2015 2016 - 2020 2011-2020
Total
(Billion
VND)
Rate

(%)
Total
(Billion
VND)
Rate (%)
Total
(Billion
VND)
Rate
(%)
Total investment
capital
324.483 100 534.640 100 859.123 100
- Agricultural, forestry
and aquatic product
37.265 11,5 44.460
8,3
81.725
9,8
- Industry –
Construction
114.430 35,3 246.980
46,2
316.410
40,9
- Services 172.778 53,2 243.200 45,5 415.488 49,3
Source: The author calculates basing on (PL 6.1)
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Table 3.4. Prediction of capital demand for Central Highlands region from 2011 to 2020
according to economic sectors

Item
2011-2015 2016 - 2020 2011-2020
Total
(Billion
VND)
Rate
(%)
Total
(Billion
VND)
Total
(Billion
VND)
Rate
(%)
Total investment
capital
202.579 100 345.575 100 548.154 100
- Agricultural, forestry
and aquatic product
32.085 15,8 49.580
15,2
81.665
15,1
- Industry –
Construction
90.670 44,8 158.340
45,0
249.010
45,9

- Services
79.824 39,4 137.655
39,8
217.479
39,0
Source: The author calculates basing on (PL 6.2)
3.3. Solutions for socio-economic development capital mobilization of the Northen
midland and mountainous regions and the Central Highland of Vietnma to 2020
We need to have many goups of solutions with a lot of synchronous mechanisms to
ensure high practicability of solution groups:
3.3.1. Solution group of mobilization mechanisms and policies
- Develop a system of policies on investment: (1) Policy of investment guarantee; (2)
Policy of investment encouragement (sectors, locations, fields, capital sources, etc.)
- Create a firm macoeconomic and stable development environment (maintain stable
growth economy, ensure a stable macroeconomic environment, stable currency values,
interest rates and maintain the reasonable exchange rate).
3.3.2. Solution group to construct an attractive investment environment
- Develop stable social and political environment: (1) Investment in socio-economic
development encloses with ensuring national security, (2) implement the policy of ethnic
solidarity.
- Build economic centers, industrial zones and urban system satisfying development
demand:
+ Develop economic and urban centers in the Northen midland and mountainous regions: (1)
Build sub-area (North-west, Northeast); (2) Development economic centers on the corridor system; (3)
Develop urban space.
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+ Develop economic and urban centers in the Central Highlands: (1) Build sub-area
(North, Center and South of Central Highlands); (2) Develop urban space.
3.3.3. Solution group of renovating management and administration of government at all
level

- Strengthen the planning of socio-economic development “planning work must take one
step forward": Territorial planning (provincial, regional, inter-regional, the entire economy); sector
planning (each industry, overall economy and society, residential, urban, land, transport, irrigation,
agriculture and forestry production, etc.).
- Reform administrative procedures in the direction of opened, transparent and
simplified "one door"; establish hot line to recept information relating to the investment; local
leaders work with investors and management board of industrial zones to solve timely all
difficulties within the implementation process of investment.
- Strengthen investment promotion activities: (1) Increase investment promotion scale;
(2) Improve quality and efficiency of investment promotion work.
- Enhance cooperation, including cooperation between regions and between localities
in the region, between enterprises in all activities: training human resources, production and
business operations, etc., to form chain of links found between the local development in the
region, with each region to meet the requirements of development cooperation and the
assignment of the trend of integration with the entire economy, the region and the world.
- Innovatate activities of state agencies on investment: (1) Strengthen the
organizational structure of the state agency for investment; (2) Strengthen social criticism, (3)
Strengthen the monitoring role of community about investment, (4) clearly define personal
responsibility, the role of head in investment management.
3.3.4. Solution group of human resource development
- Develop education and training, increase intellectual standards of the people, train human
resources according to the direction of increasing scale and quality of general education and high
education.
- Develop vocational traning foundations: (1) Vocational training for famers and
households; (2) Training engineering workers for enterprises.
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CONCLUSION
Capital is an important resource for socio-economic development of each country,
each region, and each locality. For typical geographical factors, Vietnam is formed into the
regions with ethnic minorities, forming different cultural and social characteristics. The social

factor affects to the mobilization of development investment capital of the Northen midland
and mountainous regions and the Central Highlands. They have intimate relationship and
dominate ech other.
In the pasing time, Vietnamese Party and State have had many policies to raise all
investment capital resources for the region, contributing to socio-economic development.
Beside many achievements, it also has many limitations: (1) Volume and structure of
mobilization has not met development targets and requirements of economic restructuring,
has not equaled advantages and potential of the region on land, natural resources, factors of
cultural characters of peoples and human resources; (2) public capial is not effective; (3)
Mobilize investment capital and implementation process do not comply with the investment
plans lead to inconsistencies, overlapping, more "local" branches, localities, thus wasting
investment resources, (4) investment capital of economic groups, corporations and investment
in the Northen midland and mountain region and the Central Highlands is not much, yet
highly effective investment, capital region and non-state residents, great poten.
Mobilization of investment capital for the region upto 2020 should take care of the
following problems:
The first, the region has important strategic position of economics, politics, culture,
security and defense. This is the main residential place of ethnic minotities with diversified
and abundant culture immersed by traditional characters. The region has a large potential to
develop tourism enclosing with maintaining and preserving national cultural characteristics of
Vietnam; at the same time, the region shares national bordering with many countries (China,
Laos, Cambodia), facilitating to expand comprehensive economic, cultural, social
partnerships; the region has abundant and diverse natural resources (minerals, soil for
development, forestry, agriculture, fisheries, hydro power resources for hydropower
development, etc.). This is an extreme advantage to attract and mobilize investment capital
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sources to exploit potentials of natural resources. It converges many conditions to become a
development zone in the strategy of nationl economy. Therefore, it calls for a comprehensive
development strategy of economics, politics, culture, society, security, nd national defense to
put the region into the general development of the country and the world.

The second, the region has slow socio-economic development; it has high and divided
mountainous terrain and backward infrastructure that do not meet the requirements of
development, low literacy levels and human resource quality, high rate of the poor and nearly
poor households; physical and spiritual life of ethnic minorities, especially in remote areas,
has many difficulties and shortages. In addition, the hostile forces are making fully corrupt
use of issues of ethnicity and religion to provoke separatist thought, divisive ethnic unity bloc,
causing political instability, social order and safety. Therefore, the State should give more
systematic policy mechanisms, which are specific to each region or nation (pay special
attention to ethnic groups with population of less than 1,000 people), to support the
comprehensive socio-economic development.
The third, resource mobilization is prior to investment in building key areas, important
urban regions, key economic zone with scale appropriate for each region: the Northen
midland and mountainous regions and the Central Highlands, to ensure interregional
association with the major economic regions of the country, forming the development axises
and development triangles, creating the flagship satellite to pull the neighboring difficult
areas.
The mobilization of investment capital for Northen midland and mountainous regions
and Central Highlands should be implemented synchronously the following contents:
Firstly, develop mechanisms and policies to mobilize capital sources of socio-
economic development of the region. Focus on mobilizing and using resources from the state
budget; ODA is invested priorly in socio-economic infrastructure, major projects, the
dominant key affecting to to the development of many sectors, and investment interest
targeted programs for national, regional and remote, ethnic minority areas with special
difficulties. Appreciate mechanism-specific policies to attract investors in the country (in all
economic sectors: state-owned enterprises, private enterprises, households ), foreign
investors invest in developing society and economy of the North midland and mountainous
region and Central Highlands.
Secondly, develop an attractive investment environment. It is an environment which
has stable social environment and can create a firm macroeconomic environment. Construct
20

economic centers and urban system meeting development demands to create high
attractiveness to attract domestic and foreign investment sources.
Thirdly, renovate management and administration of the socio-economic authorities
with following main tasks: (1) Strengthening planning activities includes zoning planning the
overall socio-economic planning sectors: infrastructure, land, residential, urban , this work
should be a step ahead of priority, (2) promote reform of administrative procedures ,
implementation of social democracy, equality, transparency mechanisms and policies on
investment , ensuring consistency of processes and procedures at the local investment; (3)
promote and improve the quality of investment promotion activities by subject , by region and
locality and to boost ties , cooperation between all levels , levels and sectors , between central
and local in all phases of construction and issuance , policy implementation and in the
direction , administration and operational management to synchronization mechanisms and
policies to promote economic and social development .
Fourthly, human resource development was identified as a strategic breakthrough, is
the decisive factor affecting the sustainable development of the society and economy of the
Northen midland and mountainous regions and the Central Highlands. It should focus on
developing education and training, knowledge, and human resources (high-quality human
resources, vocational training for workers and farmers) to meet manpower needs for both
immediate and long-term economic and social development.
Recommendation
The first, Decision No. 449/QD-TTg dated March 12, 2013 of the Prime Minister
approving ethnic strategies up to 2020 has presented all opinions and socio-economic
development route of ethnic minority and mountainous regions; therfore, immediately need to
build long-term strategies to 2030, towards 2050 with small stages and appropriate steps, and
on that basis, determine the policies and solutions to mobilize capital for each stage of
development.
The second, the Government determines the Ethnic Committee as the conjunction
agency to cooperate with relating ministries and departments to research typical policies with
peoples’ culture factors and regional natural conditions to mobilize the maximum level of
investment resources for socio-economic development of the Northen midland and

mountainous region and Central Highlands to meet the demand of integration into the whole
country.
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The third, organize social debate about investment activities at all stages of investment
policy development. With programs and projects (important national key projects), focuse on
a number of issues: the ability to mobilize investment capital, socio-economic efficiency,
environmental impacts (natural and cultural), technology and even security and defense
issues; on the other hand, attach personal responsibility and the role iof the leader in decision
of investment policies. Also we need to make social debate in the fields of territorial planning,
planning sectors (each sector, residential, urban, land, transport, irrigation, agriculture and
forestry production, etc.). Well done of two works will bring ”double” benefit: (1)
mobilization of social intelligence for investment and planning, (2) community and society
will know and perform well all plannings ( residential, urban, land, transport, agriculture and
forestry production, etc.,) , (3) community monitors state agencies in carrying out the
investment and planning. These are the evergreen issues that contribute to help the center and
local governments implement state management work on investment and planning well.


22
LIST OF CONCERNING WORKS
1.Nguyen Van Dung (1999), Methods to mobilize and increase efficiency of using capital at tea
companies at Van Chan district, yen Bai province. Thesis of Economic Master, Banking
Department, National Economics University.
2. Nguyen Van Dung (2009), Some measures to mobilize investment capital for infrastructure
development at especially difficult communes in mountainous and remote regions, Forest and
Life Magazine, the Central Forestry Science and Technology of Vietnam, Vol. 17, p. 48-53.
3.Nguyen Van Dung (2009), Improve income of agricultural households in ethnic minority
and mountainous areas, Journal of Ethnic Magazine, Vol. 98, p. 14-17.
4. Nguyen Van Dung (Head of science topic at Ministerial level) (2010), Scientific basis to
make bilateral commercial policies (supply of materials, goods and procurement of

agricultural commodities) in the Northen ethnic minority areas; assessment of acceptance
Ministerial Council: Good.
5. Nguyen Van Dung (2011), “ The role of state-owned corporations and general companies in
investment to develop economy and society of ethnic minority and mountainous regions”,
Summary record of Scientific conference: The real status of State economic corporations in
Vietnam and development orientation, Scientific Council of Center Agencies. P. 218-225.
6. Nguyen Van Dung (2012), The role of state-owned corporations and general companies in
investment to develop economy and society of ethnic minority and mountainous regions,
Industry Magazine, Vole 1 Nov. P. 24-25.
7. Nguyen Van Dung (2013), Several issues on mobilization of socio-economic development
investment capital for ethnic minority and mountainous regions to 2020, Economic Magazine,
Vol. 5 (420), p. 52-60.