SUMMARY

A. REAL SITUATION OF MAIN PRODUCTS OF THE VIETNAMESE ECONOMY

1. Criteria for identification of main products

Theoretically, a product is considered as main product if it meets the following main criteria:

- Significantly contributing to GDP of the economy.

- Significantly contributing to state budget.

- Having good effect on development of other sectors or contributing to promote development of other sectors.

- Contributing to increase in exports of the country.

- Creating more jobs for labours.

- Having strong competitiveness.

- Having large market potential.

- Having high economic efficiency.

Based on the above criteria, a number of localities in Vietnam have built criteria to identify their main industrial products such as Hanoi city, Ho Chi Minh city, Da Nang city, Tien Giang province, Dong Nai province… These localities have also issued policies to support to development of their main products. However, at national level, there are no official criteria of main products of the economy as a whole so that it remains different ideas related to identification of main products. Unlike some localities mentioned above, Vietnam has not had specific programs to promote development of main products of the country.

This situation sets forth requirements that Vietnam should have specific orientation to study to identify main products of the country, creating basic for issuing policies to promote development of main products at national level. There are many approaches to study, however it had better to follow the approach to competitiveness of products. It means that the products which have strong competitiveness will become main products of the economy.

During the past years, a number of institutions have studied of competitiveness of products, especially the study of Ministry of Industry of competitiveness of industrial products carried out in 2004. According to this study, at the time of 2004, there were 32 industrial products with strong competitiveness, 44 industrial products with medium or potential competitiveness and 14 industrial products with weak competitiveness. However, there have not been similar studies in sectors of agriculture or service so that it is very difficult to identify main products in these sectors.

2. Competitiveness of economies and main products

2.1. Competitiveness of economies

According to definition of many experts “competitiveness of an economy is ability to sustainably rase and maintain high and sustainable economic growth, to raise ability of production by the way of innovating and using of higher technology, skilled training, to be interested in social justice and to protect environment”.

In order to rank economies in competitiveness in the world, annually published in Global Competitiveness Report (GCR), WEF uses the Global Competitiveness Index including many different criteria (Box 1). At present, the GCR is popularly considered as an official and reliable publication to assess competitiveness of economies.

2.2. Competitiveness of main products

A product is considered to be competitive in market when it has lower price than similar products with the same or higher quality. Normally, identification of competitiveness of a product bases on four main criteria as the following:

(1) Competitiveness of quality and diversity of product;

(2) Competitiveness of price of product;

(3) Ability of product to enter new market;

(4) Ability of product to attract customers.

In general, competitiveness of product must be assessed in terms of all aspects: quality of product; category of product; diversity, model, packing of product; prestige of trademark; stable supply; price and marketing of product.

In order to ensure strong competitiveness of main products, they must meet the following requirements:

- Taking the best advantage of present advantages.

- Having low production cost.

- Having high quality.

- Having high economic efficiency.

- Having high production capacity.

- Significantly contributing to quick and sustainable development of the economy.

- Having ability to significantly contribute to shift of economic structure and development of other economic sectors.

- Significantly contributing to exports of the economy.

- Creating more jobs for labours.

2.3. Competitiveness of the Vietnamese economy and its main products

Since 1997, in general, competitiveness of the Vietnamese economy has been gradually improved. However, Vietnam still ranks at low-medium level in terms of competitiveness in the world. According to the GCR 2007-2008, Vietnam ranks 68^th among 131 economies, remarkably lower than China (ranking 34^th and Thailand (ranking 28^th). The main reason is weakness in infrastructure, human resource, science and technology, business sophistication and innovation…

Competitiveness of main products of Vietnam is in the same situation. Despite gradual improvement in recent years, it remains weak at both domestic market and foreign market. The main reason is weakness in production and business activities of Vietnamese enterprises, making products have high production cost but low quality. The next reason results from inherent weaknesses of exported products of Vietnam, such as high proportion of crude products or low proportion of technology-intensive products, leading to weak competitiveness. The other weakness of Vietnamese products is lack of prestige trademarks. In many cases, Vietnamese enterprises have to rely on foreign trademarks.

B. SOLUTIONS TO ENHANCEMENT OF COMPETITITVENESS OF MAIN PRODUCTS OF THE VIETNAMESE ECONOMY

The above real situation requires solutions to enhancement of competitiveness of main products of the Vietnamese economy. In coming time, we need to focus on main groups of solutions as the following:

(1) Identification of main products of the economy and annual assessment of competitiveness of these products.

(2) Increase in quality and reduction of production cost of products.

- Innovation of equipments and technologies.

- Applying modern management practice.

- Increasing productivity.

- Training human resource.

(3) Organization of chain of domestic production and sale of products, especially for main products.

- Building chain of linkages in production and business.

- Building chain of distribution and sale of products.

­ (4) Participation in chain of international production, taking advantage of foreign resources.

(5) Enhancement of market research, market information, marketing and trade promotion of enterprises

- Market research.

- Product strategy.

- Distribution strategy.

- Marketing and promotion strategy.

6. Innovation of institutional and legal system of the economy, concentrating on encouraging, supporting to and requiring enhancement of competitiveness of the Vietnamese economy, enterprises and products, especially main products.

7. Making effort to build famous trademarks of Vietnam in the world market.