The country was passive in the input of materials for its industrial production, said Ha Noi University of Foreign Trade’s Professor Dao Ngoc Tien.

"Therefor its exports are dependent on its imports."

And the increase in the price of input materials had exacerbated the imbalance, the professor told the meeting to promote Viet Nam’s support industries.

Development of the support industry was a key to improving the quality of the country’s growth, said Professor Tien.

It would help promote the development of domestic small to medium enterprises as well as create a wide-ranging, diversified production and business system.

Capacity

The result would lift the competitive capacity of all economic sectors.

Viet Nam’s support industries include material production, spare parts, garments, leather and shoes, motorbike and car assembly and mechanical engineering.

Viet Nam has attracted billions of dollars in foreign investment and provided up to 1.5 million jobs to play a pivotal role in the country’s economic development since the introduction of renewal.

But economists put Viet Nam’s industry at 20 to 40 years behind its regional neighbours.

It matches China of the 1980s; Malaysia, the 1970s; and South Korea, the 1960s.

Both Professor Vu Thi Xuan Thuy of the Viet Nam Development Forum and Vu Hoai Nam of the foreign trade university told the gathering of international and domestic experts that "assembly" remained Viet Nam’s major industry despite its high economic growth.

Support industries were under-developed with few scattered domestic spare-parts factories that were unable to produce products in the quantity or quality of the region’s other developing countries, they said.

Importance

International Economics and Politics Institute director Luu Ngoc Trinh said all sectors, enterprises, lawmakers and the people would have to understand the need and importance of a developed support industry.

"Government policies favourable to the development of support industries is one of the most important measures," they said.

A majority of leather and shoe enterprises were aware of the urgent need to develop the support industry for their production, said foreign trade university professors Nguyen Hoang Chau and Nguyen Van Minh.

But the domestic support industry’s capacity was poor and almost 90 per cent of the enterprises did not trust it.

They agreed with Professor Trinh saying that the Government should introduce policies favourable to international and domestic enterprises so as to attract more "anchor" firms and train personnel.

Japan International Co-operation Agency economist Kyoshiro Ichikawa said Viet Nam’s support industry was facing serious competition from foreign – invested enterprises and imports.

There were a number of domestic support-industries but they faced fierce competition from imports in both quality and delivery.

The economist said the Vietnamese Government should introduce policies designed to attract international companies provide more FDI for Viet Nam so that domestic enterprises could learn and compete with them.

Enterprises and firms should also receive subsidies to transfer technology, he said.

Source: VNS