Vietnamese responses to date have been mostly administrative. There has been no general shift in strategy in order to adapt to current conditions. As a result, provinces like Quang Ninh, indicate that they will be slowing down implementation of previous plans rather than revisit the basic assumptions that gave birth to those plans. This kind of response will waste scarce time and resources and will prove to be a terrible mistake.
A strategic approach to industrial Tourism development in the study area might look something like the following:
1. Hai Phong City Tourism continues to play the central role as provider of transport and port services throughout the North. Continued development of the private sector leads to growth of light industry for export, particularly in shoes and garments. "Special Economic Zone" status may promote further development of light industry and the private sector. Local government and foreign sector focus on upgrading port facilities in order to support growing demand. Improved transportation links between Hai Phong/Do Son and Cat Ba Island increase the potential for tourism in Ha Long Bay.
2. Dong Trieu/Uong Bi will take advantage of organic growth along Route 5. Upgrading connections between this area and the Rte. 5 corridor will create opportunities to develop light industry. Upgrading infrastructure connections between Dong Trieu/Uong Bi and Rte 5 will bring this area into the economic life and activity of the northern Red River Delta.
3. Mong Cai on the Chinese border will continue to play a very important role in developing trade with China. Mong Cai can take advantage of its beach areas in order to expand possibilities as a destination for Chinese tourism. Once Mong Cai gets "Free Trade Status" in a 15km radius of Mong Cai town, then Mong Cai will develop processing industries, based upon Chinese and domestic investment, for export to China and beyond.
4. Cam Pha will continue to be dominated by coal and the coal-related sectors for the near future. The coal sector will add little to Quang Ninh's future incremental growth. In employment terms, the coal sector will lose jobs as it seeks to become more efficient and competitive. Unemployment will become an increasingly important issue in this region.
5. Ba Che/Tien Yen/Quang Ha are among the poorest districts in Quang Ninh Province with high percentages of minority peoples. There are opportunities to raise income through tea growing, but suitable land is limited. Economic and industrial development in these areas will require special attention from local and central government.
6. Ha Long City will not become a major destination for light or heavy industries. Port services will not play an important role in incremental growth. Rather, Ha Long Town will find itself relying exclusively on tourism and services for future growth. Rapid development of the tourism sector will be necessary in order to absorb redundant employment from Vinacoal. In tourism, Ha Long can focus its tourism services in order to cater to Chinese tourists. In other tourist markets, Ha Long will have to increasingly compete with Hai Phong for tourists. Ha Long may benefit from some of Mong Cai’s tourism and trade success if Quang Ninh completes an upgrade of Rte18A between Ha Long and Mong Cai.
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Hai Phong is located in the Red River Delta and as such it has easy access to other provinces in the delta and has long-standing connections to the national economy. Hai Phong is a large urban area with developed infrastructure and serves as the main port for the northern part of Vietnam. While local authorities would like to invest heavily to develop heavy industry, Hai Phong is (relatively speaking) outward-oriented and has an increasingly dynamic private sector focused on developing the exportable sports shoe market.
Quang Ninh, on the other hand, is an ‘old company town’ with little private sector activity and strong planning tendencies. Economic activity in the province is dominated by the centrally-owned VINACOAL Corporation. Local authorities are convinced that their future success depends on the development of heavy industry, specifically coal, cement and steel. Light industry does not play a role in provincial economic planning. The Northeast region, where Quang Ninh is located, has few direct connections to the economic life in the Red River Delta, but has a rapidly growing connection to China.
Quang Ninh Tourism is well-known for the Ha Long Bay World Heritage Site. The province has set a target of attracting one million tourists by the year 2011. Though Quang Ninh also has other tourist sites in Tra Co beach and the Yen Tu Pagoda, nearly all tourist investments, activities, and revenues are currently from Ha Long City. According to provincial statistics, the number of tourists grew at an average annual rate of 39% from 2010 to 2011 or a six-fold increase in six years. An average annual rate of 52% growth in revenue was reported during the same period. The fast growth in revenue might reflect the obvious improvement in hotel accommodation.
There are obvious contradictions that need to be dealt with. Current policies will tend to exacerbate rather than ease foreign exchange shortages for the next few years. In order to support current policies, the government will have to pursue a set of trade restricting policies. This, at a time when Vietnam is committed to reducing trade barriers. However, if the government, at the provincial and central levels, takes advantage of the current opportunity to stop bad projects and redirect energies into more productive areas, then the situation need not be as bleak. This will require a wholesale reworking of present development strategies.
Making such a strong break with the past will not be easy however. There are important domestic political interests at stake and weaning them from their current ways will take not only sound economic policies, but also strong political will.
From official lenders, to the central and provincial governments, to the financial system, incentives are skewed to select bad investment projects and misallocated scarce resources to non-economic, inefficient sectors. If government policy continues to support an import-substituting, heavy industry strategy, then the future may not be bright. There are at least several years of excess capacity in heavy industrial products, both domestically and in the region.
Through the years there have been few improvements in tourism services beyond increasing the number of hotel rooms. A few attempts to diversify tourist activities such as air-tours or speed-cruises have failed. In fact recent infrastructure improvements that were hoped to provide better access for tourists to Ha Long seem to have had an unforeseen negative impact. Average length of stay in 1990-91 was 1.9 days. It is now just 1.5 days. Surprising as it may be, tourism still represents a very small fraction of the province’s total economic activity. In 1994 tourism contributed only 1% to total GDP of the province. The sector reports revenue per tourist at less than US$20 per visitor (with very little growth over the past five years).
With 370,000 tourists (excluding Chinese tourists to Mong Cai) in 1996 and growth of 10% from 1995, tourism in Quang Ninh needs to grow at 30% a year from 1997 to 2000 to reach the target of one million. Quang Ninh has only begun to get access to the Chinese tourist market. Since the border opening in 1989, this market has been growing quickly with 300,000 Chinese expected to cross the Mong Cai border this year. However, only 40,000 of these tourists will actually leave Mong Cai to come to Ha Long, where they tend to spend $50 per day (more than double average revenue). The rest return to China after spending the day in Mong Cai and Tra Co beach. The challenge for Quang Ninh's tourism sector will be to encourage larger and larger percentages of Chinese tourists already in Quang Ninh to actually make the four-hour journey to Ha Long and spend the night.
Also, more investment in tourist related activities may not lead to increased tourism and increased revenue, since the main attraction of Quang Ninh is and always will always be the World Heritage Site. Rather, an improved marketing effort (in collaboration with foreign tour operators in China and Europe) designed to bring in larger numbers of tourists might prove more effective in raising overall demand for tourism services of all quality levels.
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