Surf, Sand and Software Turn Danang Into Vietnam’s ‘It’ City, reports Bloomberg Business

02 May 2015

[Bloomberg Business, 29 April 2015] John Boudreau and Nguyen Dieu Tu Uyen have written an article published in Bloomberg News on 29 April titled, Surf, Sand and Software Turn Danang Into Vietnam’s ‘It’ City.

AusCham has a growing presence in Danang and is represented by Mr Quentin Derrick.

An edited extract of the article referred to above can be seen below. Click here to read the original, unabridged, article.

…Chuck Palazzo (a former US Marine) is back, this time as a tech entrepreneur contributing to the planned construction of one of Southeast Asia’s most modern cities…“It is ambitious,” said Palazzo… “(Danang is) welcoming foreigners. In terms of process and getting things done, Danang is by far much more friendly to businesses than Ho Chi Minh City”…

Vietnam’s Singapore

Decades after the city revolved around the U.S. military air bases, Danang is recasting itself as the Singapore of Vietnam, touting a transparent and efficient government. A building boom has transformed the landscape into a budding metropolis, ranked at or near the top of the Vietnam Provincial Competitiveness Index for good governance and business-friendly policies since 2007.

The city government spent $4.5 billion in infrastructure projects in the past five years, a surge from $1.7 billion in the previous five years, according to Danang’s statistics office.

About $60 million went into a new airport terminal, $88 million on the striking, sail-shaped city hall and $93 million on a three-level overpass. IBM’s system provides real-time updates on bus routes and monitors water quality, while 300 kilometers (186 miles) of fiber-optic cable installed by Cisco Systems Inc. connects all the government offices.

Unlike the larger Hanoi and Ho Chi Minh City, which have much older infrastructure, Danang has the advantage of starting afresh…

Fire-Breathing Bridge

Wide streets and a new airport terminal make for hassle-free commuting across the city, said Hung Nguyen, co-founder of LogiGear Corp., a Silicon Valley software testing company that chose Danang over Ho Chi Minh City to expand its Vietnam operations.

The city’s master plan calls for its population to double to 2 million by 2020, said Huynh Lien Phuong, vice director of the Danang Investment Promotion Center. But the government isn’t interested in the growth-at-any-price model that China adopted in past decades.

“Danang doesn’t blindly compete to attract everything,” said Edmund Malesky, an associate professor of political economy at Duke University in Durham, North Carolina, and the lead researcher for the competitiveness index. “So dirty manufacturing plants don’t end up next to agricultural land.”

Chicken Run

The city has turned away projects, such as a textile dye plant and a shipbuilding operation, said Huynh Van Thanh, vice director of Danang’s Department of Planning and Investment.

“We are a little picky,” Thanh said in an interview…

The plans include housing for 10,000 tech workers, a shopping center and international schools, said Bui Van Doanh, head of the park’s investment promotion division. Tokyo Keiki Inc., Niwa Foundry Co. and a Vietnamese company will be the first tenants, he said.

The challenge is to find enough skilled workers to fill the new plants, said Lam Nguyen, Ho Chi Minh City-based country director at International Data Corp…

Broken Pipes

To help find that balance between expanding tourism and the economy and making sure the roads and power and sewage treatment plants can keep up, the government six months ago opened its new city hall, a 34-floor building whose sail design symbolizes the Communist leaders’ desire to connect with the global economy, said Phuong, at the Investment Promotion Center located in the new building.

The headquarters includes offices from all government agencies for easier access for citizens and investors alike. People can e-mail officials directly, and there’s a call-center to field complaints, from broken water pipes to being overcharged by hotels, said Nguyen Quang Thanh, vice director of Danang’s information and communications department.

“The high-tech government center is something you don’t find in Hanoi or Ho Chi Minh City,” LogiGear’s Hung Nguyen said. “They have some leeway to do things differently…”

Thanh’s efforts helped lure foreign hotels and companies such as Furama Ltd., with its resorts and four-bedroom beachside villas, Coca-Cola and Mabuchi Motor Co., one of the world’s biggest manufacturers of small electric motors.

Since 1987, the city has granted licenses for 324 foreign direct investment projects from 37 countries with a total of $3.38 billion in registered capital, Phuong said. Recent inquiries have included Apple Inc. and Airbus Group NV.

“Danang is miles ahead of everyone else as a leader in being proactive in encouraging foreign investment,” said Ho Chi Minh City-based David Blackhall, managing director of VinaCapital Real Estate Co (VinaCapital is an AusCham Member). “If you need to modify or change a plan, it could take years in most places in Vietnam. In Danang, it happens in weeks…”

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