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 1 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 2 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 3 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 5 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 6 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. 7 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 8 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 [...]... 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. .. 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 Total Rate (Billion (%) VND) 2016 - 2020 Total (Billion Rate (%) VND) 2011 -2020 Total Rate (Billion (%) VND) Total investment capital - Agricultural, forestry and aquatic... 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... 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... 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. .. 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... 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. .. training for famers and households; (2) Training engineering workers for enterprises 18 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 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. .. 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 . 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. 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. 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