Danang Development Plan to 2030 Approved

A master plan for the development of Danang between now and 2030 has been officially approved by the Prime Minister. Here’s what’s on the agenda for Vietnam’s third-biggest city.

On November 2 of this year, the Prime Minister of Vietnam issued Decision No. 1287/QD-TTg officially approving the Danang City Plan for the Period 2021 – 2030, with a vision to 2050. This will, moving forward, serve as a master plan for the development of Vietnam’s third-biggest city, outlining key infrastructure and industrial developments.

This is in line with Danang becoming a popular alternative among foreign firms looking to establish themselves outside of the traditional manufacturing hubs around Hanoi and Ho Chi Minh City. In particular, it has proven attractive to IT and tech firms—Ubisoft for example, has its Vietnam base in the central city employing upward of 100 creatives.

But Danang is also shaping up as a manufacturing base, too. The Lien Chieu Port, covering 450 hectares and being developed at a cost of 3.42 trillion VND (US$137 million) promises to give factories in central Vietnam a boost, making it easier for goods to get in and out—its expected over the next few years that Danang will become a pivotal cog in the Vietnam economic machine.

It’s with this in mind, that the recently approved development plan is worth a closer look.

Danang’s three development pillars

Danang’s city planners intend to develop the city in three key areas.

Tourism

Danang’s coast is lined with hotels and resorts. For some time, it has been a key destination for both local and domestic tourists. This has seen the city boom as tourists’ dollars have poured in.

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Moving forward, planners intend to build on this strong tourism base. They intend to develop resort real estate, international event centers with cultural elements, and unique experiences to further promote Danang as a key tourist destination in Vietnam.

Danang also wants to become a center of high-quality tourism, including building high-class, green, smart, organized marine and ecological resorts. It also wants to be a key site for international conferences and festivals and aims to develop more high-end and ultra luxury tourism products.

Technology

Danang has become very popular with tech firms looking for a low-cost base for their Southeast Asian operations. Danang intends to build on this momentum, listing the information technology (IT0 industry as one of its key development pillars.

The city’s authorities will do this by promoting the high-tech industry associated with building creative urban areas and startups, and encouraging the establishment of IT, electronics, and telecommunications businesses. This includes a number of IT parks.

See also: Why Da Nang Remains Attractive for Foreign Investors 

Infrastructure

The third pillar of Danang’s 2030 plan is infrastructure. This includes focusing on high-quality seaports, airports for logistics services, as well as financial infrastructure with the goal of becoming a regional financial center.

Economic goals

The plan also lays out a number of key objectives and specific targets planners expect the city to achieve. These include:.

• Economic growth of 9.5 to 10 percent with a stretch target of 12 percent.
• Agriculture, forestry, and fishery expected to grow by 2.5 to 3 percent.
• Industry and construction expected to grow by 10 to 10.5 percent.
• The service sector expected to grow by 9.5 to 10 percent.

By 2030, the breakdown of Danang’s economy is expected to be:

• Agriculture, forestry, and fishery accounting for about 1 to 2 percent.
• Industry and construction accounting for about 29 to 30 percent.
• The service sector accounting for about 61 to 62 percent.
• Product tax minus product subsidies accounting for about 8 to 9 percent.

Additionally, the decision lists several other key metrics, including:

• Gross regional domestic product (GRDP) per capita, at current prices, should reach between US$8,000 to US$8,500.
• Total factory productivity should contribute 50 to 55 percent to economic growth.
• The total number of visitors should increase by 17.5 to 18 percent a year.
• Accommodation, food, and travel revenue should increase by 12.5 to 13 percent a year.
• The logistics industry should account for about 10 percent of GRDP.
• The digital economy should account for about 35 to 40 percent of GRDP.
• Around a quarter of GRDP should be attributable to high-tech industry, information technology, electronics, and telecommunications.

Social goals

The plan also its several key social objectives:

• Average population growth should reach 2.9 percent.
• The city’s population should be about 1.56 million people.
• 78 percent of workers should be considered trained.
• 66 percent of workers should have a degree or certificate.
• Whereas Danang has universal pre-school, primary education, and lower secondary education, it is also aiming for 30 to 35 percent of preschools and 40 percent of high schools to meet national standards.

Sector-specific goals

The Danang planners have also laid out roadmaps for development in several specific sectors. These are indicated below.

Trade

It’s envisioned in Danang’s 2030 master plan that Danang will become one of Vietnam’s major commercial centers. This would entail developing modern infrastructure and situating the city as a center for goods leaving, coming into, and being distributed around Vietnam.

It’s also expected that retail sales will grow on average 10 to 12 percent a year. Danang aims to see that a good portion of these sales are done online and paid for digitally.

Information technology

Danang has its sights set on becoming one of the three leading localities in digital transformation, information security, and e-commerce in Vietnam. In this light, it is targeting sector growth of 10 percent a year.

Furthermore, it wants information technology, electronics, and telecommunications to become a key economic sector with an annual revenue growth rate of 2 to 2.5 larger than the city’s GRDP growth rate.

To do this, it intends to form concentrated information technology parks and chains of software parks and to promote research and development of key information technology products. It also intends to prioritize the development of the software industry, including digital content production, circuit design and production, and the provision of information technology services.

Finance and banking

Danang also sees itself as becoming a regional financial center. It lists improving access to quality financial services, promoting the development of non-cash payment methods, and the development of sustainable financial products and services—among its core goals for the sector. It also foresees an average growth rate in the sector of 8.5 percent a year.

Industrial park development

Manufacturing businesses currently operating in Danang or looking to establish themselves in Danang between now and 2030 have a number of options in terms of industrial parks.

Industrial park development in Danang

Information technology park development

Alongside its industrial park development, Danang has also developed and is continuing to develop a number of information technology parks.

Information technology parks in Danang

Costs

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All of that said, Danang’s development between now and 2030 will not come cheap. It’s estimated that about VND 800 trillion (US$$32.9 billion) will be needed. This is about 40 percent of GRDP. It’s expected that the national government will chip in 25 percent of the total investment, with the domestic private sector contributing about 60 to 65 percent, and the remaining 10 to 15 percent coming from foreign investors.

What’s next?

With the Danang City Plan for the Period of 2021 – 2030, with a vision to 2050 now approved, investors in Vietnam’s third-biggest city can move forward with some certainty as to how the authorities are envisioning Danang’s development. That is to say, tourism and the IT industry will be prioritized, and this is likely to result in incentives for firms in these sectors to set up in the city.

As a popular alternative to Hanoi and Ho Chi Minh City, a number of foreign firms are now already operating in Danang. For assistance joining these trailblazers, foreign firms looking to establish themselves in central Vietnam should contact the business advisory experts at Dezan Shira and Associates.

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