Ass.Prof and Dr. Tran Nguyen Tuyen

Globalisation and international economic integration affect the socio-economic development of each country and international relationships. The process originates from laws of international production force development and labour allocation.

In the current context, international economic integration is not purely taxation cuts but expansion to all fields relating to economic trade policies in order to open markets for goods and services, abolish visible and invisible barriers in trade exchange.

The matter for Vietnam is how to effectively integrate into the international economy, ensuring benefits to the nation and improving the competitiveness of its economy and successfully implementing socio-economic development goals in the integration process. The political report from the IX national Party congress, especially Resolution 07-NQ/W issued on November 27, 2001 by the Political Bureau on international economic integration stressed initiatively integrating into regional and international economies in accordance with maximumally developing internal resources, at the same time taking advantage of external resources to promptly develop to ensure independence, self-control and socialist orientation, national interests, national defence and promote national cultural characters and ecological conservation.

This is a sound guideline in the diplomatic and integrated relationship of the Party and state. According to the viewpoint, international economic integration is a process that begins with opening an economy, taking part in international co-operation allocation creating favourable conditions to effectively coordinate internal and external resources, expanding environments to develop and occupy an appropriate position in international economic relations.

Integration helps create business opportunities, and facilitates the penetration of the international market to build an appropriate economic structure and develop the local economy. Improving the competitiveness of the economy, enterprises and goods is one of the most important issues for integration into the international economy and successfully carrying out goals of socio-economic development strategy in the 2001-2010 period.

In the past, Vietnam’s economy gained remarkable achievements such as rapid gross domestic product (GDP) growth, an economic structure shift toward increasing the proportion of industry, services and gradually decreasing the proportion of agriculture. The rate of capital for development investment is tending to raise; better mobilisation of resources from society, especially the private sector. However, the economy’s competitiveness remains low.

Competitiveness and the management capacities of enterprises are weak and not ready to effectively respond to on-going integration. Prices, quality, consumption networks and enterprises’ prestige are less competitive than other countries in the region and in the world.

The country’s advantage of young labour force is vanishing due to fierce competition from regional countries, especially China. The development of new products meets various difficulties in capital, technology, labour force and technology.

Economic growth is not equal to the investment increase and slow economic structure transfer has not brought into full play comparative advantages of departments and products. Service sector is invested remarkably but makes up a small proportion of GDP. The system of support development services is weak. Labour structure is shifting slowly and is not equal to the transfer of economic structure, especially in agriculture.

Although promoting internal resources for development has gained progress, domestic capital makes up over 70 percent, foreign development investment (FDI) has fallen off for the past several years. In 2002, FDI flow was only 60 percent of the previous year.

Monetary-financial activities have achieved progress but are still risky. The interest rate is much higher than that of USD. This increases the input costs of production and business and reduces the competitiveness of products.

Generally, Vietnam’s preparations to cope with the competitiveness of international economic integration have been slow, lacking an international economic integration general national strategy has led to confusion in establishing a strategy for every ministry, department, localities and enterprises. Some economic development policies are carried out slowly and lack consistency.

To improve the competitiveness of its economy, Vietnam should create a national competition strategy, especially competitive policies. Building and implementing competitive policies in the direction of gradually abolishing discrimination in business and minimising unhealthy competition are priority issues. Based on the direction, the country should promptly issue a competition law and control business monopolies.

In addition, Vietnam should do the following: improve investment environment to attract domestic and foreign investment in the direction to cut down input cost of some products such as electricity, telecommunications, ports and road fees; timely settle difficulties in site clearance, build infrastructure to ensure consistent and transparent policies; build legal framework for both domestic and foreign investment with incentive regulations appropriate to subjects; reform taxation system to meet requirements of integration process of opening economy and build a uniform tax system for all economic elements; consistently implement multi- and bilateral agreements Vietnam has signed.

Vietnam should strengthen trade and investment promotion with big partners such as the European Union, the United States and Japan to expand its market and make the most of advanced technologies and management; build and carry out an overall strategy of international economic integration; negotiate and promptly prepare necessary conditions to help Vietnam enter into the World Trade Organisation in 2006; focus on arranging and reforming state-run enterprises, mechanisms, improve the capacity of administrative apparatuses and reform the salary system, raise the sense of responsibility and standards of officials and workers to meet the demands of integration.

Source: www.cpv.org.vn