Challenges in implementing decentralization of foreign direct investment management in Viet Nam – case study of the Hung Nghiep Formosa Ha Tinh Steel project in Ha Tinh province

Au Thi Tam Minh ()
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Au Thi Tam Minh: Researcher/lecturer of the Institute of State and Law – Ho Chi Minh National Academy of Politics, 135 Nguyen Phong Sac, Ha Noi, Viet Nam

Asia-Pacific Sustainable Development Journal, 2019, vol. 26, issue 2, 83-105

Abstract: Over the past decades, an increasing number of developing countries in Asia have experimented with decentralization in varying degrees to achieve good governance and promote democracy. In Viet Nam, even though decentralization has been limited to de-concentration (or administrative decentralization), foreign direct investment (FDI) management is vigorously decentralized at the provincial level and has proven to be problematic. In one instance, it led to an environmental disaster in 2016. The objective of the present paper is to explore the factors resulting in ineffective decentralization of FDI management in Viet Nam, focusing on the challenges that the local government has been dealing with under the decentralization set-up, in particular with respect to environmental protection. Drawing on the case study of the Hung Nghiep Formosa Ha Tinh Steel project in Ha Tinh province, it is argued that Viet Nam continues to lack the essential prerequisites for effective decentralization. It is the time for Viet Nam to reconsider the policy of decentralization in the area of FDI management. Bearing in mind that economic development is vital, it should go hand in hand with environment protection in order to ensure the country’s sustainable development.

Keywords: decentralization; foreign direct investment management; Hung Nghiep Formosa Ha Tinh Steel project; environmental protection; sustainable development (search for similar items in EconPapers)
JEL-codes: H11 H77 P21 P33 Q58 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:unt:japsdj:v:26:y:2019:i:2:p:83-105

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