Prime Minister Nguyen Xuan Phuc speaks at the teleconference of the Ministry of Industry and Trade (Photo: VNA)

Hanoi (VNA) – The Ministry of Industry and Trade (MoIT) should reduce industrial development’s dependence on natural resources while fostering innovation-based industries, Prime Minister Nguyen Xuan Phuc said on January 6.

At a teleconference to set up tasks for the MoIT this year, the PM emphasised that science-technology and innovation are an important development direction of Vietnam’s industrial sector.

He noted in the short term, alongside high added-value industries, the country still has to rely on natural resource-based and labour intensive industries.

To develop a nation with strong competitiveness, a fair business environment for all people and businesses must be created first. This is a critical task of a growth-facilitating Government of which the MoIT is a member, he said.

Outlining tasks for the sector in the year, PM Phuc told the MoIT to thoroughly deal with the big loss-making projects under its remit, reiterating that money from the State budget must not be wasted further on these projects.

The ministry needs to devise policies for developing some important industries such as automobile, electronics and mechanics while stepping up trade promotion. It should also encourage all economic sectors, including State-owned enterprises, FDI firms, equitised companies, and cooperatives, to engage in developing industry and trade, he added.

The Government leader also instructed developing support industries and industries serving agriculture, especially hi-tech agriculture. He suggested a campaign be launched to promote industries that serve hi-tech agriculture so as to turn hi-tech agriculture into a strength of Vietnam.

At the meeting, he also applauded the industry and trade sector’s contributions to the national development, adding that processing and manufacturing grew 11.2 percent last year, compared to 10.5 percent in 2015. The total retail sales of goods and services also expanded 10.2 percent, compared to 9.72 percent in the previous year.

The PM praised the campaign “Vietnamese people prioritise using Vietnamese goods” as effective and the fight against smuggling, trade fraud, counterfeits and low-quality goods has been improved.

PM Phuc also pointed out certain shortcomings such as many loss-making projects, ineffective development strategies for some industries, problematic management of the domestic market and cross-border trade, sluggish re-organisation of State-owned companies, and controversial appointment of some officials.

Reporting on his sector’s performance, MoIT Minister Tran Tuan Anh said the whole industrial sector expanded by 7.5 percent in 2016. While mining contracted 5.9 percent, processing and manufacturing rose 11.2 percent.

There remain big issues, he noted, elaborating that industrial growth still depended on the increase of the business number, investment capital and labour. Domestic firms are now only able to do sub-contracting work with low added value and have to import a large volume of raw materials. Oil extraction has hit its limit while investment in exploration activities is facing difficulties.

Export revenue was nearly 176 billion USD in 2016, a year-on-year rise of 8.6 percent but lower than the growth target of 10 percent, the minister said, noting that about 70 percent of the turnover was contributed by foreign invested firms.

Vietnam recorded a trade surplus of 2.68 billion USD last year, which Anh considered as a result of the industry and trade sector’s efforts amid disadvantages in global markets such as falling prices of many key commodities, including crude oil and agricultural and aquatic products.-VNA