On the road to integration
(VIR): To harvest more fruitful results from the international integration process this year, Vietnamese enterprises need to be more informed about the international playing rules. Meanwhile, government bodies must be more proactive in servicing and facilitating the business community. Deputy Prime Minister Vu Khoan offers his views on these issues.
Vietnam is pushing ahead with its negotiations with various bilateral trading partners to finalise deals for joining the World Trade Organisation (WTO). If one looks at the Vietnamese economy currently, they can see the countrys economy has already integrated deeply into the world market. Lets look at the ratios of exports and foreign direct investment in Gross Domestic Product (GDP) as examples.
Last year, Vietnams total export was equivalent to a half of the countrys GDP, while FDI flow into the country stood at around 14% of the GDP. With the coming accession into the WTO, Vietnam will have completed its process of integrating into the world economy. From that point, the country will have to play on the world market using common rules set by the WTO.
The WTO entry will bring many benefits to the country via an expanding market, equal treatment as enjoyed by other WTO members, more investment capital and advanced technology. Look at the garment and textile industry as an example. As Vietnam is still not a WTO member at the moment, Vietnamese-made garments and textile exports remain under quotas. This limits the huge export potential and production of the country.
On the other side of the coin, if Vietnam were a WTO member, like a ship sailing on an ocean that has to cope with high waves and strong wind, the economy has to accept stronger competition from outside. Once joining the WTO, Vietnam must open its market for foreign goods and investors. This will be the biggest challenge.
In this context, Vietnam has no alternative but to raise the competitiveness of the whole economy, including the competitiveness of enterprises, goods and services. At the national level, it is vital to create a synchronous legal framework with a high level of clarity and transparency and form an attractive environment for business activities of all economic sectors.
Government agencies should step into enterprises shoes to work out suitable policies for the business community.
Governmental bodies must not only protect national interests but also facilitate businesses as much as possible to help them develop.
Government agencies should not create more red-tape and obstacles for enterprises. The civil service should pay more attention to providing information for businesses, especially small and medium enterprises, who have limited access to information.
In short, government agencies must shift from governing and controlling business activities to facilitating and servicing the business sector. The "ask-grant" mechanism, where businesses have to get permission from the government bodies to do what the laws allow them to do, should be abolished.
For enterprises, they have to be well informed of market information and international rules to be able to work out proper business plans. Businesses should be more proactive in performing market, trade and investment promotion activities.
More importantly, local businesses should build up closer cooperative ties to compete with foreign rivals. To lift competitiveness of their products, Vietnamese enterprises have to reduce production costs, raise product quality and produce goods for consumers tastes.
However, people should have a more optimistic view on the competitiveness of Vietnamese goods.
Many locally produced products have been able to defeat imported goods on the local market, including beer, confectionery, clothing and plastic goods. Many goods have taken high positions on the world markets, like rice, coffee, pepper, clothing, footwear, furniture and fish products. This means that Vietnamese goods have not only not been knocked down on the local market but also won footholds on the world markets.
Clearly, the competitiveness of Vietnamese enterprises is increasing. Vietnamese goods are getting bigger and bigger shares on both domestic and international markets.
This is due, for the most part, to the efforts of Vietnamese enterprises. Vietnamese people adapt very fast to new situations.
Consequently, since the economy opened up to foreign competitors in 1986, Vietnamese enterprises have grown a lot. They are now more proactive and skilful in doing business with foreign partners./.
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