Ha Noi (VNA) -- Joining the World Trade Organisation presents both opportunities and challenges to industry, according to Minister of Industry Hoang Trung Hai.
Now that Viet Nam has become a WTO member, Hai says, the dropping of tariff and non-tariff barriers will constitute a major challenge to the competitiveness of domestic industry.
Hai says that the competitiveness of Vietnamese industry is weak compared to other countries in the region, in such aspects as labour productivity, production effectiveness, business success, science and technology levels and management capacity. Low productivity, high production costs and products that lack innovation can also be attributed to poor and top-heavy management, says Hai.
"These factors have weakened the competitive edge of enterprises," he says.
Although industry has contributed up to 76 percent of the nation's export turnover, primary exports have been mainly products with some built-in advantages, like crude oil, textiles and garments, leather and footwear, wood furniture, and electronics and computer components, Hai says.
These products' advantages depend a great deal on low labour costs and the availability of raw materials, Hai adds, but these advantages are tending to decline.
A few other industrial products have gained high export growth, including electrical wire and cable and plastic products, but their values and markets shares remain low. Most Vietnamese industrial businesses remain small- or medium-sized enterprises, Hai noted, so they lack capital to invest in new technology. Existing technology remain backward and obsolete.
The high cost of telecommunications, energy and other services, coupled with a low-skilled labour force, are among other causes leading to poor performance of industry.
Hai outlines four major solutions for improving the competitiveness of industry and expanding export markets in the future.
First, ministries and sectors need to work together to complete the legal and administrative system in order to support the needs and growth of a market economy. A revised legal system will provide the basis for fulfilling the country's international commitments to the WTO and to trading partners.
Second, products need to be developed that will maximise Viet Nam's advantages.
Third, State-owned enterprises need to be reorganised to encourage greater investment in production and business improvement, and Government policies need to specifically promote the development of small-and medium-sized enterprises.
Fourth, enterprises need to take specific actions to improve their own competitive capacity, a key factor in deciding the success of Vietnamese-made products in the domestic and international markets.
In addition to these four major solutions, Hai says, the ministry will facilitate and create conditions for industrial business associations and enterprises themselves to cooperate with foreign partners to expand businesses and apply advanced technology in their production.
Hai says that the ministry will act as a focal point in international cooperation by organising seminars, workshops, study tours abroad and information exchanges among enterprises in order to keep them up-to-date with the latest market information.-Enditem |