Thanh Nien: How do you define an industrialized nation?

Philippe Scholtés: There is no exact definition for industrialized country or new industrialized country. One or two years ago, an official from the Ministry of Industry asked me that question. Consultations with experts of UNIDO headquarters in Austria found no exact definition or criteria—for instance proportion of industry in GDP or the growth rate of manufacturing industry in GDP.

The term "Newly Industrialized Country" (NIC) was first used in reference to countries or regions like the Republic of Korea, Singapore, Taiwan and Hong Kong some 20 years ago. People used the term but gave it no precise definition.

For Vietnam, I believe the target of an industrialized nation is realistic. Vietnam has very unique features as compared to countries at the same aggregate level of overall development (GDP of 600-700 USD per capita per year): as much as 40% of your GDP comes from the industrial sector; over 70% over your exports are manufactured goods. That is unusual: take for instance sub-SaharanAfrican countries with a similar GDP per capita. Typically their manufacturing industry accounts for around 10% of GDP only and export raw materials like crude oil, rice, coffee or cotton.

I believe that if Vietnam can maintain the growth rates recorded under the renewal (Doi moi) process for the next 15 years, Vietnam will be a Newly Industrialized Country by 2020.

Thanh Nien: Vietnam should invest in which fields to pursue its goal of an industrialized nation in 2020?

Philippe Scholtés: Infrastructure, institutional foundations and human resources are key elements.

We can see that exported goods of Vietnam now are mostly laboring the labour-intensive category like leather shoes and garments. The next goal should be manufactures with a higher technology content, up to a stage of knowledge-intensive exports like softwares.

In the technical field, besides paying attention to human resource training, the way to acquire know-how should be noted too.

Vietnam now acquires technology through foreign direct investment projects, which, to some extent, is quite dangerous. I believe that leaders of Vietnam acknowledge this danger as Vietnam may become overly dependent on foreign commercial interests which do not always algin with the harmonious development of the nation. Vietnam should maximize its own strengths in acquiring its needed technologies.

Thanh Nien: What is the effect of WTO membership on Vietnam’s industry?

Philippe Scholtés: The media probably exaggerate the threats of binding agreements and inter-dependence as Vietnam is about to join WTO. Similar predictions were made with respect to the phasing out in 2005 of the Multi Fibre Agreement, when Chinese garments were expected to flood the markets and obliterate the garment industry everywhere else..  

True, we saw that scenario unfold in early 2005, but since then Vietnam’s garment industry has made impressive progress. I believe that entering WTO does not necessarily mean tragic scenarios for domestic industries. Rather, Vietnam will enjoy benefits such as the recourse to international arbitration in case of commercial disputes, whether on cat fish, shrimps or footwear exports..

Thanh Nien: Is there any change in the recently signed 2006-2010 technical agreement between Vietnam and UNIDO?

Philippe Scholtés: The key thrust in the agreement plan will be assisting medium size enterprises owned and operated by Vietnamese. Official Development Aid to Vietnam’s industry is very limited, as donor countries focus on poverty elimination, rural development, environment or upgrading national institutions.

In contrast, we are trying to delineate a common ground between development objectives and private sector’s interests. Private investors can help Vietnam on the path to prosperity while maintaining a balanced socio-economic structure. We are implementing many projects in this line, which receive strong support from private enterprises. I believe that there is a potential for constructive engagement between the State and private companies in Vietnam.

Reported by Thu Huong – Translated by Thanh Tuan

Source: Thanhnien news 18/05/2006