Singapore serves as a close example for HCMC. Within 30 years, the island nation with no natural resources has become a regional financial hub with the headquarters of many international companies and the transport and telecoms infrastructure able to meet the development demand. The special mechanism, together with the preservation of Vietnamese cultural identity and the “oriental features” over the course of development, would help turn HCMC into an attractive, unique metropolis.

The National Assembly’s Resolution 98/2023 on the development of HCMC covers 44 policies and mechanisms for seven areas, but they should focus on three economic pillars, including business and trade development (starting from 2023), turning the city into an electronic component and semiconductor factory (in 2027), and establishing and developing the HCMC Foreign Exchange Center in 2025, gearing towards the HCMC Financial Center in 2030. Mobilizing State capital from tax and non-tax income sources for the city’s development and seeking other financial sources for projects, whether State or private, is the prime matter for achieving the development target. That is the reason for the need to build a financial center in HCMC, though the special mechanism does not mention this area as an investment priority, and the city is not delegated power to select strategic investors for it. To achieve the target of development and prosperity, the necessary condition is to build a market economy in its true sense for HCMC, from which the city can have financial sources to achieve targets manifested through the payroll for civil servants and public employees and the social welfare system, such as schools, hospitals, and care centers for disabled people, orphans, and the elderly. The role of the State is to build a backbone foundation, and the rest is left for investors and people to develop. The market economy principle would lead them towards the prosperity target. Within the current legal framework, the city government should thoroughly grasp the idea of “a rich people, a strong city”; so it should create a favorable business environment, not barriers to businesses. This is the prime criterion to assess a financial center. The market economy requires the foundation of property ownership and freedom of doing business, that is, fair competition among businesses of different economic sectors. HCMC has a big source of capital, which is the assets under its management and use. Exploiting this source of capital would bring about revenue not less than the revenue allocated from the State budget annually. The city should ask the Ministry of Finance and the Ministry of Natural Resources and Environment to inventory and recognize assets under its ownership, including first the offices of State agencies and State-owned businesses under the city’s management. Based on this effort, the city can manage the assets, such as using, leasing, joint exploitation, equitization, and managing the capital at equitized enterprises. Urban development under the transit-oriented development (TOD) mode is not quite a new idea. The city should develop according to planning, including transport, which should cover not only roads or urban railways but also seaports (in Can Gio District) and connected airports. Regarding investment management, the necessary role of the State in facilitating business is to enhance the transparency of planning and investment regulations. The city should make public the zoning plans of all districts with detailed maps distinguishing residential, agricultural, commercial, and industrial development lands. It should complete granting land use right certificates and the property registration system, including land use rights. The special mechanism allows the city to attract private investment in infrastructure under the build-operate-transfer (BOT) mode and even the build-transfer (BT) mode with payment from the city’s budget. It also allows for the expansion of private participation in culture and sports. For investment projects under the public-private partnership (PPP) mode, the success depends on the balance of interests between the private investors and the majority of users of public services, which the city allows private investment. Objective study and survey of public opinion are necessary steps before drafting a PPP investment project. Distinction should be made between BT projects settled with State money and investment from the State budget and those won through auction by private companies. The total funds needed for transport infrastructure investment in HCMC in 2021-2025 are estimated at some VND266 trillion, including VND92 trillion from the city’s budget and VND174 trillion from PPP investment, 1.9 times as much as the city’s investment budget. It should be noted that private investors use only a small part of equity capital, equivalent to 10-20% of the total investment, and the rest must be mobilized from financial organizations. Bank loans are not an appropriate financial arrangement for development projects (by private investors and the city’s government), as the difference between the terms of capital mobilization and use increases the debt repayment significantly. Therefore, the capital should be mobilized from the financial market, including corporate shares and bonds. The city can borrow funds from other sources (non-financial organizations) but should pay attention to this point. Regarding land management, it is reasonable that organizations which the city allows leasing land annually can mortgage the land, but allowing them to transfer or sub-lease the land would affect the right of the owner representative. In the current situation, to support business recovery, the city should reduce the cost burden for businesses, but the special mechanism plans to increase fee collection and administrative staff, including the number of deputy heads. What the public expects most from the special mechanism is it would bring about changes in the operation of the city administration from the city to district and ward levels, such as reducing expenses for the administration that should be streamlined and enhancing its efficiency by continuing to develop digital transformation and building an e-government. The proposal for solutions and task assignment should be executed with consideration of the administrative machinery, the financial capacity, and the qualification of staff. The special mechanism allows building a professional machinery through enrolling staff with good specialty and technological knowledge who are excellent students from universities and colleges based on the development of an educational system from the elementary to tertiary levels and vocational training in the top group in Southeast Asia. Setting the assessment criteria for the operation of the administrative machinery with regard to the achievement of tasks of State agencies through professional organizations is also an effective assessment method. Some other issues include the execution of the constitutional rights of people, socio-economic organizations, and experts, such as participating in building administrative and economic regulations in the city before promulgation and assessing them in the course of implementation. The judgment of business disputes should be expedited based on the law. The transparent judgment and protection of the lawful right of people are important factors for assessing the business environment. The above suggestions are some major ideas necessary for the execution and making full use of the new special mechanisms for HCMC. The suggested works should be done fast and forcefully in the second half of this year and 2024 to resurrect the city’s economy as an engine for the national economy, which is projected to still face many difficulties. To accelerate the equitization, State-owned enterprises (SOEs) in need of equitization should be classified into two groups. (1) SOEs over which the city must hold control: Private investors can participate in those SOEs but in a spirit like the PPP in investment for the development of public goods and services. Institutional investors rather than public investors should be selected. (2) SOEs where the State will not hold control but divest in the most profitable way: Around 5-10% stake can be sold to strategic investors and 5-10% to small investors; the State still owns 80-90% stake. The roadmap for divestment of all State capital from those SOEs should be made clear in the equitization plan. The gradual divestment and transfer of management right to the board of directors: With the small stake sold at the beginning, the value of the SOEs may not be correct. The main goal is to turn those SOEs into joint-stock companies. After listing on the stock market, the value of the SOEs will be determined by the market. Though the State still holds a majority stake, it will not fully control the SOEs but transfer control to the board of directors.