Research by experts shows that there are many different paths in developing the International Financial Center (IFC) that Ho Chi Minh City and Da Nang can learn from.
Research by experts shows that there are many different paths in developing the International Financial Center (IFC) that Ho Chi Minh City and Da Nang can learn from.
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| Ho Chi Minh City needs to focus on the city's key markets and products in the coming period. |
Focus on your strengths
According to experts, based on the development lessons of other countries, the process of building an IFC on a global scale usually takes 20 - 30 years. There are many different paths to development, but it is often divided into 3 stages with 3 levels.
At the first level (nascent stage), it is often focused on the needs of the domestic financial market. The ecosystem is not yet complete due to the lack of presence and full development of some stakeholders. Key policies and infrastructure have not caught up with best practices.
Accordingly, experts believe that Ho Chi Minh City is in the first stage of this journey, and needs to focus on the city's strong markets and products in the coming period. Because at the first level, IFCs around the world focus on specializing in markets and products with competitive strengths. For example, IFC Dubai in the first stage focused on attracting leading managers to establish representative offices to serve regional customers, then established a free trade zone for goods, focusing on precious metals and agriculture.
Meanwhile, IFC Singapore is focusing its efforts in the early stages on building the asset management industry, continuously improving the implementation of fintech sandboxes and granting digital banking licenses.
Hong Kong (China) focuses on attracting leading international banks, asset managers and other intermediaries while maintaining an open, competitive market with strong infrastructure.
IFC Dublin (Ireland) specializes in exporting international trade finance services through the implementation of preferential tax arrangements and the issuance of research and development (R&D) tax credit incentives.
IFC London (UK) deploys the world's first fintech sandbox and increases efforts to attract venture capital, thereby developing a fintech industry strategy to strengthen its position as a global fintech hub.
At level 2 (development stage), IFCs develop a strong financial cluster, competitively leading the region. Attracting capital from many different jurisdictions. The intermediary ecosystem is increasingly mature, including some leading global funds, banks, etc. The capital market is constantly maturing with the application of more and more advanced products.
At the highest level 3 (maturity stage), the ecosystem is complete, operating smoothly between intermediaries and core businesses. Investments allow the regulatory environment to follow best practices. IFCs establish a strong international network in the global financial system. Financial markets are diverse, deep and leading in new product innovation.
Currently there are IFCs New York, London, Hong Kong (China), Tokyo, Dubai at this highest level.
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Consider applying to Ho Chi Minh City
International lessons on the roadmap for building and developing IFC are worth considering for application to Ho Chi Minh City.
For example, in Singapore, the country first established the Central Business District (CBD Singapore) to concentrate commercial and financial activities in one location. The CBD Singapore is a combination of office services, residential real estate, restaurants, hotels, retail and other entertainment services. But new development projects of each service group are planned and oriented, all must be based on the office space and complex elements that can be determined according to the requirements of the market and tenants.
Singapore then moved into the expansion phase of the CBD sub-area, providing space to support the development of the CBD into a global business hub.
Throughout its development stages, the target industries that Singapore CBD focuses on are not only financial institutions, but also include business-related services, government organizations, multinational corporations, tourists (business and leisure), residents and further developing to the group of visitors (business and leisure) during the expansion period.
London, on the other hand, is developing in three phases. Phase 1 focuses on becoming a financial district, providing office space. Phase 2 focuses on becoming a work/living area, providing a small boost for new industries. Phase 3 revolves around the idea of becoming a center for innovation, science and technology, focusing on space for technology and research.
Each stage has its own goals and objectives, which guide the development of a clear system of support services and utilities.
From the above international experience, experts believe that in Thu Thiem Urban Area (Thu Duc City), the core location should be IFC Ho Chi Minh City with high-end services and a full support system, while creating links with the existing financial areas in District 1 and District 3. Form international financial centers along the Saigon River, and at the same time combine with districts in the core central area of the City to build other convenient service activities...
Experience in building IFC management apparatus
Experts say that a special agency should be established to manage IFC. This recommendation comes from the success of IFC in other countries.
For example, Singapore has the Monetary Authority of Singapore, which has the power to issue legal instruments to manage and supervise financial institutions, and establish frameworks and guidelines applicable to many different types of financial institutions.
IFC Dubai established three independent financial agencies: the Dubai Financial Services Authority, responsible for independent management of finance and related services; the DIFC Authority, responsible for overseeing strategic development and operational management; and the DIFC Court, responsible for commercial and civil judicial activities at IFC Dubai and its units.
The IFC Governing Body also has the role of proposing and implementing specific mechanisms/policies designed according to international best practices for IFC. At the same time, this Governing Body has the role of enhancing the effectiveness of coordination between ministries, sectors and localities.
It can be seen that the establishment and development of IFC not only brings economic benefits, but also strengthens Vietnam's position in the region and in the international arena. The fact that large, leading investors in the world (especially from developed countries) do business at IFC Ho Chi Minh City will help promote the image of Vietnam.
The values that the International Financial Center brings
Developing an International Finance Centre (IFC) not only brings economic benefits, but also improves the country's talent development. Singapore is a typical example of attracting top international universities to improve the quality of education. As a result, the country has up to 60% of its workforce is highly skilled. Singapore also uses favorable income tax policies and attractive financial subsidies to attract foreign human resources, making the island nation a magnet for world-class talent, with more than 3,000 investment professionals.
IFC has also made significant contributions to promoting financial inclusion and financial security, increasing access to financial services for small and medium-sized enterprises and individuals. Hong Kong (China) is a testament to this by enhancing its digital economy and supporting policies, focusing on the balance between consumer protection and innovation. All of this has contributed to Hong Kong being ranked in the top 2 in the financial inclusion index, top 4 in the safety of financial risk rankings, and top 10 in the access to capital rankings globally.
IFC also promotes innovation and technology. For example, the UK has created an attractive tax policy for venture capital investment, actively supporting “incubators” and sandboxes. As a result, more than 2,500 fintech companies have been established in the UK, attracting nearly $12 billion in investment.
in 2021 alone.
IFC has also been pushing infrastructure. For example, the United Arab Emirates (UAE) has invested in airport modernization, metro expansion, and road infrastructure improvements. As a result, the UAE has risen to fourth place in the rankings of the most livable and workable cities, second in terms of basic infrastructure competitiveness, and 20th in terms of technological infrastructure competitiveness globally.
Source: https://baodautu.vn/phat-trien-trung-tam-tai-chinh-quoc-te-va-bai-hoc-cho-tphcm-d243713.html
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