Enterprises urged to get creative

Besides the important role of the government in creating a favorable, transparent business environment, local enterprises should become more active and creative in preparing for more intensive global integration.

During a recent conference held in Ho Chi Minh City on business competitiveness and free trade agreements, Dr. Vo Tri Thanh, Deputy Head of the Central Institute for Economic Management, said that most small- and medium-sized enterprises in Vietnam had not considered wider global integration in their business strategies.

Most foreign-invested companies in Vietnam, however, have developed strategies to prepare for the ASEAN Economic Community which takes effect by year-end.

"The benefit of integration is finding out actual success or failure, and the capacity, of enterprises. Things that develop due to special protection or priority will not exist. The areas in which we have an advantage include agriculture, aquaculture, garments and textiles, footwear, furniture, and others," Thanh said.

The logistics sector has a great deal of potential for the future. In Hai Phong, for example, thousands of enterprises have been established in this sector recently.

The service sector also has potential, as the Samsung factory alone, for example, needs 2,000 security guards, Thanh said.

Regarding the role of creativity and technology in enhancing competitiveness, he said that simple low-tech equipment and solutions still held possibilities, such as a wastebasket opened with feet, scissors for left-handed people, or paper used to wrap toothpaste tubes (instead of plastic) in hotels.

Thanh said that after the US and Vietnam established diplomatic relations in 1995, many business people feared they would not be successful in exporting to the big market.

But one year later, the US became Vietnam's biggest export market. Fifteen years later, Vietnam's export turnover to the US had risen 30-fold.

"There is still a lot of room for Vietnamese enterprises to export to the market as Vietnamese goods contribute only one percent of the US imports," he said.

Local companies must make adjustments and examine their strategies carefully in order to survive, he said.

As for the upcoming Trans Pacific Partnership (TPP), local enterprises should be more active in seeking information about the FTA as the negotiating countries have been reluctant to disclose details about the ongoing negotiations.

Economic expert Bui Van said he had tried to asked governments of some countries for information but had been turned down as the countries had committed to not revealing negotiation details.

"However, enterprises have a right to guess with the assistance of consulting organisations. We are able to make guesses about TPP according to the ‘rule' of the US, which is leading the TPP," Van said.

Thanh said that Vietnam had participated in negotiating or signing 15 free trade agreements, but most enterprises know only 14 agreements.

Many enterprises still do not know much about the FTA between ASEAN and Hong Kong now under negotiation.

Dang Duc Thanh, Chairman of the Vietnamese Economist Club, said after studying 30 successful enterprises in Vietnam, he found they had developed good business strategies after studying the market carefully, and mobilised funds from shareholders instead of taking out loans.

He said Vinamilk was equitised in 2004 with total investment fund of 1.5 trillion VND. Now, the State-owned capital at the company totals 2 billion USD (40 trillion VND).

Kinh Do Company was founded in 1993 with 1.4 billion VND. Recently, a part of the company was sold to an American investor for 270 million USD, Thanh said.-VNA