The Mekong Delta an Emerging Investment Destination in Viet Nam: Sustainable Growth, Improving Infrastructure and an Excellent Investment Climate

8 Reasons to Invest in the Mekong Delta

This resource was submitted by the Climate Risk Institute for use by the CanAdapt Climate Change Adaptation Community of Practice.

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1. Strong economic growth: Foreign direct investment (FDI) is increasing at more than double Viet Nam’s national average and flowing towards a more diverse range of projects than ever before. Economic growth and activity are increasing across all sectors, presenting opportunities across the entire business spectrum.
2. Excellent investment climate: The Mekong Delta region continued to lead the country in improving the quality of economic governance in 2018 with particular advantages in five areas:(1) easy access to land and security of business premises; (2) limited time requirements for bureaucratic procedures and inspections; (3) minimal informal charges; (4) minimal crowding out of private activity from policy biases toward state, foreign, or connected firms; (5) proactive and creative provincial leadership in solving problems for enterprises. Because of these advantages, the Mekong Delta region is receiving the attention of domestic and foreign investors in Viet Nam.
3. Direct transport links and excellent infrastructure: Due to substantial investments in transport infrastructure, access to the Mekong Delta has improved significantly. Meanwhile, communications and energy infrastructure are improving rapidly. Seventy-four planned industrial zones, including 45 operating industrial zones, offer highly competitive prices and investment incentives, providing increasing options for investment.
4. Large market with 17.7 million consumers With a population of more than 17 million, the Mekong Delta has a bigger population than the Netherlands and neighbouring countries, such as Cambodia or Laos. This large consumer base is gaining purchasing power; the Mekong Delta ranks third in terms of purchasing power in Viet Nam. Per capita income in the Mekong Delta provinces continues to increase, especially in the growing urban centres.
5. Strong labour force and high social standards: While labour costs in the Mekong Delta are competitive compared to the rest of the country, strong social standards such as minimum wage, labour protections, and labour rights ensure a solid and reliable framework for international businesses. A system of vocational training institutions covers all provinces and cities, enabling the region to respond to the specific labour demands of enterprises.
6. A booming agriculture and aquaculture industry: With highly fertile land and good access to water for irrigation, the Mekong Delta is a highly productive agricultural zone. Improved professionalization of the industry, as well as advancing agro-processing, are providing ample opportunities for investors. Both industries are now moving from quantity to quality, which reduces pressures on the ecosystem and significantly increases the demand for better-quality input materials, including agricultural equipment, seeds, fertilizers and pesticides.
7. Climate change as a business opportunity: The Mekong Delta is one of the regions worldwide most affected by climate change. This is why in the coming years, billions of US dollars will be invested in resilient infrastructure such as roads, bridges, water and energy facilities, embankments and dykes. Investment will also create opportunities for investors in the fields of climate services, climate-smart production models in agriculture and aquaculture, and the integrated management of water resources.
8. Ample runway for further progress with many emerging potential investment fields: Despite all these advantages, the Mekong Delta remains an underrated destination. Although FDI is growing by nearly 20% per annum, the Mekong Delta still attracts less FDI than many other regions in Viet Nam. The results are highly competitive conditions for those who decide on the Mekong Delta as an investment destination. Besides core economic sectors, some new sectors are showing potential for further development in the Mekong Delta; for example, (high-tech) agriculture, information and communication technology (ICT), logistics, renewable energy, real estate, and tourism. Development plans for these sectors are being implemented, which provides additional and diverse options for investment for both domestic and international enterprises.