Jackets being made for export at Hanoi-based Garment 10 Corporation (Garco10) Nhan Dan – How to take the initiative in diversifying economic relations and ease dependence on other economies were the issues of concern to enterprises, leaders and experts at a conference themed ‘Self-reliant economy in an interdependent world’ held by the Vietnam Chamber of Commerce and Industry on July 3. Chairman of Vietnam Building Materials Association, Tran Van Huynh said that despite efforts of Vietnamese enterprises in expanding their scale of production and in penetrating potential markets, they have mainly developed traditional economic relations with specific partners. Thus, any change or policy adjustment could affect Vietnamese enterprises. Senior economic expert, Pham Chi Lan reckoned that many domestic enterprises were predestined to do outwork and did not want to change their business. They had no motivation for investing in support industries or in producing intermediate products, she added. According to Vice Chairwoman and General Secretary of the Vietnam Textile and Apparel Association (VITAS) Dang Phuong Dung, the localisation rate of the Vietnam garment and textile industry in 2013 was only 47.1%. A challenge for the apparel industry is the heavy dependence on imported materials (accounting for 86% of the total domestic demand) which is mainly blamed for the low capacity of the domestic dying industry, which meets only 57% of total domestic dyed fabric demand. In addition, 70% of domestic garment factories are CTM (Cut, Make and Trim) factories that bring in low added values and low income. The rubber industry, one of the Vietnam’s key exported goods, also runs into the same problems as it often exports raw rubber with moderate quality to several markets, which hides many risks. Deputy Minister of Industry and Trade Do Thang Hai said that in previous years, Vietnam exported 70% of litchi output to China but the proportion has been reduced considerably in recent years. Thanks to joint efforts of relevant ministries, sectors and localities, 60% of litchi output is now domestically consumed. Deputy Minister Hai said the ministry was working to boost domestic consumption and export of other types of fruits, along with learning advanced preservation technology from foreign countries. Doctor Tran Van Huynh proposed that the State should remove inappropriate policies creating barriers to business operation and development. On the other hand, the businesses should improve their product quality to meet technical requirements. According to Chairman of the Vietnam Association of Mechanised Industry, Nguyen Van Thu, the State, relevant ministries, sectors and investors should clarify bidding packages and assigned them to proper domestic enterprises. He stressed the urgent need for localisation in manufacturing required equipment, in a bid to reduce imports of these products, thus reducing dependence on partners. It is also necessary to boost the production of materials using in mechanical industries, to reduce dependence on foreign producers. At the recent Government regular meeting last month, Prime Minister Nguyen Tan Dung asked sectors at all levels to speed up the process of economic restructuring, while increasing productivity, quality, efficiency and competitiveness of the economy. They were also requested to work on measures to avoid dependence on any particular market, broaden export-import markets and encourage domestic consumption. Regarding quality of contractors, the Government leader said that the issue was based on the requirements and awareness of investors as well as the inspection of relevant agencies. Vietnam is negotiating free trade agreements (FTA) with the European Union (EU) and the Republic of Korea, the Customs Alliance of Russia, Belarus and Kazakhstan, and the Trans-Pacific Partnership (TPP) Agreement among others. It is important to the country to effectively take advantage of the FTA and international commitments. Once the FTA is signed, a number of Vietnamese products are expected to enjoy tax reductions; some of them can enjoy a zero percent tax rate, as well as preference in meeting technical barriers. It is a huge opportunity for Vietnamese businesses to expand operation in these markets. It also helps encourage foreign businesses to run operations in Vietnam, to take advantage of the benefits. Doctor Le Dang Doanh, former Director of the Central Institute for Economic Research and Management said that to increase self-reliance and independence of the economy, Vietnam should be more active in participating in the global value chain, increasing product value, particularly agricultural products. Vietnamese businesses should also focus on revitalising science and technology to raise the competitiveness of their products. According to VITAS Chairman, Dang Phong Dung, to reach sustainable development in the garment and textile industry, Vietnam should utilise FTA and TPP benefits while boosting support industries and targeting appropriate markets.
Posted on: Sat, 05 Jul 2014 19:12:54 +0000
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