Located in the southern key economic region, Ba Ria-Vung Tau Province boasts many advantages in seaports, tourism and industry. With the existing potential and advantages, the establishment of a free trade zone in Ba Ria-Vung Tau is being proposed as a strategic lever for attracting domestic and foreign investment capital.
Potential for developing the free trade zone
Ba Ria-Vung Tau (BR-VT) has a favorable geographical location as it is located near international shipping routes, not far from Ho Chi Minh City – the largest economic center of Vietnam, enabling it to easily connect with Southeast Asian markets. Notably, the Cai Mep – Thi Vai port system, one of the 21 largest deep-water ports in the world, can accommodate ships of over 200,000 tons, so it plays an important role in international trade.
In recent years, Ba Ria-Vung Tau has made significant achievements in attracting FDI, developing production, boosting exports, and playing a leading role in regional connectivity in the country’s southeast. Thanks to budget revenue from oil and gas, investment in industrial development, seaport economy and services, the province has had positive changes with synchronous investment in transport infrastructure and is one of the leading urban areas in the country in terms of per capita income.
Additionally, the Politburo issued Resolution No. 24-NQ/TW dated October 7, 2022 on socio-economic development and ensuring national defense and security in the southeastern region until 2030, with a vision to 2045. The Prime Minister also issued Decision No. 370/QD-TTg on May 4, 2024 approving the planning of the southeastern region for the period 2021-2030, with a vision to 2050. Accordingly, it has provided a vision of “Establishing a Free Trade Zone associated with a seaport in the Cai Mep Ha area in Ba Ria-Vung Tau Province”.
At the conference to disseminate and implement the Resolution of the Politburo on socio-economic development, ensuring national defense and security in the southeastern region by 2030, with a vision to 2045 at the end of October 2023, Mr. Pham Viet Thanh, member of the Party Central Committee, Secretary of the Provincial Party Committee, Chairman of the People’s Council of the province affirmed: “The establishment of Cai Mep Ha Free Trade Zone associated with the East-West industrial – urban corridor (nearly 300km long) from Moc Bai (Tay Ninh) to Cai Mep Ha in the south of the country will create a competitive advantage for Vietnam compared to other Southeast Asian countries and globally in the new development stage of our country.”
Efforts to establish the free trade zone
The geographical location, potentials and natural advantages of Ba Ria-Vung Tau are enhanced by the southeastern region, which contributes 32% of GDP, 44.7% of the total state budget revenue, and produces the largest volume of goods in the country, accounting for 45% of the total volume of goods and more than 60% of containers through Vietnam’s seaport system. These factors serve as key resources and sustainable strengths that play a particularly important role in the development of Ba Ria-Vung Tau. This is also the reason why the Politburo agreed to choose Cai Mep Ha to establish a free trade zone to create a new driving force for the socio-economic development not only in Ba Ria-Vung Tau but also in the entire southeastern region.
To prepare for the establishment of the free trade zone, Ba Ria-Vung Tau has proactively performed a number of necessary tasks such as updating the policy on developing a free trade zone into the Ba Ria-Vung Tau Province Planning for the period 2021-2030, with a vision to 2050. The province has also developed the planning of Cai Mep Ha Logistics Center with an area of 1,686.73 hectares, prepared a pre-feasibility study report for the project to submit to competent authorities for approval of the investment policy. Investments have been made in inter-port and inter-regional traffic projects; and the province is coordinating with the Central Government and localities in the region to promote the implementation of transport projects connecting the southeastern region; especially connecting the Cai Mep-Thi Vai port system with Long Thanh International Airport, Ho Chi Minh City International Financial Center, and industrial and urban centers in the region. Efforts to create a feasibility study for establishing the Cai Mep Ha Free Trade Zone are also underway.
There are multiple views that in order to soon establish the Cai Mep Ha free trade zone, there needs to be a specific institutional mechanism. According to Mr. Tran Thanh Hai, Deputy Director of the Import-Export Department (Ministry of Industry and Trade), the Cai Mep-Thi Vai port cluster lacks a unified port authority, so each port has its own management method which causes inefficiency. Each port system can study the establishment of a port authority, unifying port focal points to help synchronize operations and ensure coordinated development. Therefore, research is needed to build a specific mechanism for an open economic zone, free economic zone, and open port with policies suitable for foreign investors and domestic investors who want to expand abroad.
The policy of “Establishment of a free trade zone associated with a seaport in Cai Mep Ha area” is a right and strategic policy. This is an opportunity for Ba Ria-Vung Tau and the provinces nearby to develop rapidly, continuing to be the economic locomotive of the whole country in the period up to 2030, with a vision to 2045. The free trade zone associated with the seaport will contribute to the development orientation of the Cai Mep – Thi Vai port complex, bringing direct effects such as attracting FDI, creating jobs, and increasing exports and foreign currency revenue. At the same time, it also brings spillover effects in improving labor skills, attracting high-quality human resources, upgrading science and technology, diversifying the economy, developing high-tech industries, and creating value for the role of Ba Ria-Vung Tau Province in the global value chain,” Mr. Tran Thanh Hai emphasized.
