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Vietnam's Four-Year WTO Membership Reviewed (19/4)
19/04/2011 - 12 Lượt xem
The National Committee for International Economic Cooperation under the Ministry of Industry and Trade said that since Vietnam became a member of the WTO, foreign and domestic trade has developed robustly. Statistics released by the Central Institute for Economic Management at the beginning of this month revealed that Vietnamese exports totaled US$48.6 billion in 2007, a 21.9 percent increase from 2006, and US$62.7 billion in 2008, a 29.1 percent increase from 2007. However, due to the global financial crisis, Vietnamese exports fell 8.9 percent to US$57.1 billion in 2009. Despite the drop, exports in 2009 were 45.8 percent higher than prior to Vietnam's WTO entry. Thanks to the increases in the world price of many products, Vietnamese exports continued to grow 26.4 percent in 2010. The growth however was unsatisfactory, because of a widening trade deficit. Specifically, statistics by the Central Institute for Economic Management also indicated that the trade deficit for Vietnam was only US$5.5 billion in 2006 but soared to US$14.2 billion in 2007 (a little more than one year after Vietnam joined the WTO), US$18 billion in 2008, US$12.8 billion in 2009 and US$12.6 billion in 2010, despite the government's great efforts to curb trade deficit.
Experts said that if trade deficit continues for many years it would lead to a move abroad in foreign currency and difficulties in payment and consumption.
WTO membership has stimulated the development of the domestic market. The Multilateral Trade Policy Department under the Ministry of Industry and Trade said that since WTO accession, distribution services in Vietnam have grown significantly. Currently, distribution-retail contribute about 14 percent of the gross domestic product (GDP) and employ more than five million people, a record high when compared with other service segments. Retail and services in Vietnam increased 25 percent annually from 2006-2008 compared with 18.3 percent in 2001-2005. Despite difficulties in 2009-2010 due to the world financial crisis, retail and consumer service revenue in Vietnam still increased 18.6 percent and 24.5 percent, respectively. Vietnam was also recognized as one of the most attractive retail markets in the world. After the country became a WTO member, many foreign retail groups have brought their world famous brand names to Vietnam, creating a wide source of goods to meet the consumer needs of local people. Consumer trade has changed from tradition to modern forms, and from single to multiple choice.
Dr. Nguyen Tri Thanh, the deputy director of the Central Institute for Economic Management, attended a recent workshop in Ho Chi Minh City on the impacts of international economic integration. He said that since Vietnam joined the WTO, the world has looked at Vietnam as a promising destination. Foreign direct investment (FDI) in Vietnam has increased rapidly, reaching US$20.3 billion in 2007 (twice that in 2006, a little more than US$10 billion), and a record high US$64 billion in 2008. However, the current level of FDI capital disbursement is unsatisfactory and questionable. Specifically, FDI investments in areas are uneven, and many FDI projects are only aimed to develop in width and intend to exploit natural resources, rather than create high added value or greatly affect society.
Now that Vietnam has been a WTO member for four years, it has developed rapidly with high GDP growth and significant improvements in per average capita income, which increased from US$704.37 in 2006 to US$1,133.79 in 2010. Vietnam has escaped from the group of low-income countries, and has gained high recognition from the international community, regarding the pace of hunger eradication and poverty reduction.
Regarding institutional reform, Tran Thi Hanh from the Economic Institution Research said that after WTO accession, the Vietnamese legal framework has improved, and the business environment had developed in a more transparent and fair manner. Vietnam had also instituted administrative reforms through Project 30, which intended to simplify administrative procedures. However, problems exist, regarding the quality and stability of legal documents.
Experts said that indexes for Vietnam after four years of WTO membership are insufficient to suggest a trend or sudden change. However, the biggest thing Vietnam has done is open policies on reform and transparency. This is a key factor for Vietnam to clearly see its position and shortcomings and not to pursue high growth at any cost in order to ensure sustainability in the next step of integration./.
Source: VEN
