How competitive will in-dustry remain when subsidies evaporate in accordance with our commitments to the WTO?

Industry grew by 16 per cent between 2001-2005. But the added-value target was not met. This shows that industrial competitiveness is still lacking. It’s a challenge for industry as it undergoes global integration. Viet Nam has to import raw materials to meet industry’s demands. Its industrial design capacity is modest with shipbuilders and the garment and textile industries have to buy their designs from international companies. Viet Nam industry does not yet have a signature product.

Is the lack of co-operation among Viet Nam’s enterprises a reason for the lack of competitiveness?

Co-operation will help enterprise survive and become more competitive. Co-operation among enterprises is still modest but it seems to have improved. That’s because enterprises have acknowledged the importance of co-operation. In addition, the Industry Ministry has both created favourable conditions and encouraged co-operation between enterprises and industrial associations during the past five years. The ministry sees these associations as a bridge between enterprises and the Government. The associations also help the ministry understand the difficulties and challenges faced by enterprises as they strive to develop policies and practices to enhance growth and integration.

Do you think too much importance has been given to exports at the cost of the domestic market; could this have hampered the development of competitiveness?

Too much focus on the export market may lead to the loss of the domestic market. The Industry and Trade Ministries have anticipated the risk and introduced measures to cope with it. Many products such as Sai Gon Beer, Vinamilk and Vinatex garments and textiles have won a firm share of the domestic market. Higher economic growth will help increase the domestic market’s purchasing power so enterprises should map strategies to tap the potential. Macro regulation by the ministries has enabled Viet Nam’s enterprises to introduce several models for producing and marketing products so as to gradually dominate the domestic market.

What is the Industry Ministry doing to prepare enterprises for global integration?

Viet Nam has the advantage of a stable political environment, abundant young labour and natural resources. Foreign-invested groups in Viet Nam have provided domestic enterprises with experience in management, the use of capital and development of subsidiary production facilities.

It’s most important that Viet Nam’s enterprises take full advantage of these favourable conditions to confront challenges and create the motivation for integration. The Industry Ministry’s long-term strategy is to focus on production where the advantage is high and use exports as the motivation for development of the all industry. Attention is also given to the development of heavy industry and the aim is to produce raw materials for processing. Automation and software are also targets. Governments of WTO members are not allowed to provide direct subsidies to enterprises. But support policies are allowed and Viet Nam will provide help in accordance with the international rules. The ministry has always suggested that enterprises reduce production costs to make them more competitive. Perhaps, they will face difficulties in the first days of integration but I believe they will stand firm and develop.

Source: Vietnam News