US investors have promised to pour 6 billion USD of capital and a Disneyland theme park in the city’s international financial center project, according to Mr. Jonathan Hanh Nguyen, Chairman of the Imex Pan Pacific Group (IPPG).
The appearance of the IPPG and the commitment led to two drafts of the financial center development project, developed by IPPG and the People’s Committee of Ho Chi Minh City (in consultation with Fulbright University Vietnam).
One of the big differences between the two drafts is that besides banking and financial services, IPPG proposes adding business lines such as casino, sports betting, resort and entertainment services (such as Disneyland) to the international financial hub.
Experts said that such entertainment services will help the city attract a large number of international tourists. However, that idea may cause the city to deviate from the original plan. The risk is that when it comes to the HCM City financial center, people may think of casinos or Disneyland instead of banks or a stock exchange.
Dr. Can Van Luc, member of the National Monetary and Financial Policy Advisory Council, and Chief Economist of the Bank for Investment and Development of Vietnam (BIDV), emphasized the importance of unifying the shape of the international financial center in Vietnam.
According to traditional thinking, there are three ways to visualize a financial center. The first is to concentrate financial buildings, headquarters of banks, securities firms, and insurance investment funds similar to Wall Street. The second is a center to attract investors with large projects with potential and long-term commitment. Vietnam seems to be leaning towards this latter direction. The third is an entertainment center associated with casino, tourism, or a center with a combination of the three forms mentioned above.
Dr. Luc said these traditional forms may no longer be the future trend because the financial world is changing very quickly with many new types of transactions, e-finance, digital currency… In this situation, Vietnam needs to clarify its direction.
Dr. Tran Hung Son, Deputy Director of the Banking Technology Research and Development Institute, Vietnam National University, Ho Chi Minh City, said that a financial technology (Fintech) center is the right direction for the vision.
He said if HCM City follows the traditional financial model, i.e., develops into a traditional market, it will face great competition with existing hubs. In the past 10 years, fintech has emerged as a new business model. The city has a relatively developed fin tech ecosystem. Of about 190 fintech companies in Vietnam, 60% have their headquarters in HCM City.
In addition, the city is highly appreciated by the international community for its potential to become a regional fintech hub. In 2019, the total scale of investment in fintech in Southeast Asia was about 1.4 billion USD and Vietnam ranked 3rd in capital attraction.
Notably, according to the Global Fintech Hub 2020, the fintech industry in HCM City is rated at 4/4 stars and ranked 33/40 among emerging cities globally with a developed fintech industry. This is the basis for the city to attract international capital.
Therefore, the city needs to “take a shortcut” and develop a new business model related to financial technology instead of the traditional international financial market.
In 2002, Resolution 20 of the Politburo determined to develop Ho Chi Minh City into the financial center of the country and then the region. 10 years later, the Politburo once again reiterated this goal in Resolution 16 in 2012.
In 2016, the city received an offer from American investors to pour 4 billion USD into Thu Thiem New Urban Area to turn it into a new financial center of Southeast Asia.
At the end of March 2021, the People’s Committee of Ho Chi Minh City again submitted to the Prime Minister the policy of building a project of a regional and international financial center in Ho Chi Minh City. The project is expected to be completed and submitted to the government in April 2022. It is developed by the Ho Chi Minh City People’s Committee and Ho Chi Minh City Financial Investment Company (HFIC) in consultation with Fulbright University Vietnam.
In February 2022, the People’s Committee of Ho Chi Minh City signed a memorandum of understanding with IPPG on the study and formulation of a project to build the Vietnam International Finance Center in Ho Chi Minh City. IPPG will finance the research and development of this project and commit to deliver the product 60 days earlier than the signed time.
By Thanh Van @ Vietnamnet