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Vietnamese export: rough road ahead despite high growth rate

(VNA) - Viet Nam has registered a rather high export growth rate in the recent past, but challenges are still ahead, said Pham The Dung, Director of the Import-Export Department under the Trade Ministry.

The limited number of export staples and the low value added to exports are major challenges faced by Viet Nam, Dung further said.

He pointed to the fact that a majority of Vietnamese businesses are of small size, acquiring little capital. This, the official said, has caused huge difficulties for local businesses to compete in an increasingly liberalised market. Vietnamese businesses have also failed to work out proper development plans, which should be based on their actual capacity and export opportunities.

A large number of enterprises lack long-term business strategies, or are incapable of defining development orientations and market demands, Dung also said.

He noted that a larger-than-necessary number of businesses have invested in commerce, hotel and restaurant development, the beverage, textile and garment, and leather shoe industries in the hope of earning quick money. Whereas, only a few investors have poured their money into high-tech supporting industries such as the production of electrical equipment and precise tools. A shortage of capital, a common problem for many businesses, have also made them unable to renew technology in order to create high quality export products for the national economy.

The official noted that although the Government has been exercising policies to give incentives to export producers and manufacturers, many businesses have found it hard to enjoy these incentives due to the complicated procedures. Worse still, the credit guarantee system has not yet caught up with the development of business activities. As a result, local businesses are unable to raise productivity and quality and at the same time reduce production costs.

To reach the goal of obtaining a 8.5 percent economic growth rate in 2006, the Ministry of Trade has projected an export value of 36.5-37.5 billion USD.

The ministry will first focus on the country's major foreign-currency earners such as seafood, rice, crude oil, coal, textile and garments, and footwear. In addition, it will offer incentives to export items recording high growth rates such as electronics, personal computer accessories, electric wire and cable. Manufacturers of new export products will also enjoy preferential policies.

The ministry has been working on import-export policies and refining legal documents that help ensure the smooth operation of a market economy, meet requirements by the World Trade Organisation (WTO), and facilitate Viet Nam's integration process.

The ministry will tailor trade promotion and marketing programmes to the actual requirements of businesses. It also plans to further promote e-commerce and IT application.

The Trade Ministry will help businesses get timely market information, covering regulations on quality and hygienic requirements, and warnings on-tariff and non-tariff barriers imposed by imported countries, so as to make prompt adjustments to their business plans.

 
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