Decree to boost investment in support industries

The Government has issued a decree that is expected to boost support industries and improve the competitiveness of Vietnamese products, advancing the country's quest to become industrialised by 2020.
The Government has issued a decree that is expected to boost supportindustries and improve the competitiveness of Vietnamese products,advancing the country's quest to become industrialised by 2020.

Support industries provide jobs and promote exports, but on top ofeverything else, prevent excessive dependence on imported goods andservices.

But their development has been slow inVietnam because policies are not attractive enough to investors, thedeputy director of the Department of Light Industry, Tran Hung, said.

A master plan to develop support industries was created in 2007.

Two years later the Ministry of Industry and Trade (MoIT) set up a centre to help develop business in support industries.

Directly managed by the Industrial Policy and Strategy Institute, itis tasked to develop a database and links between businesses.

Construction of the country's first support-industry park began in April 2009 in Bac Ninh province near Hanoi .

Last July, the Government approved a plan to build a support-industry zone south of Hanoi .

Though some progress has been made, auxiliary industries have yet to make a breakthrough, the Government website says.

To achieve the breakthrough, certain industries should be identifiedfor focused development at regular periods, a task that has been donesuccessfully in some neighbouring countries, it says.

Vietnam has achieved success in developing support industries forthe motorbike and electrical appliances industries, Hung told a workshoptitled "Auxiliary industries and Goods Production and Export" held latelast year in HCM City .

But some other keysectors like machinery, garment and textile, and footwear are hurt bythe lack of support industries, which is causing them to dependexcessively on imported feedstock and inputs, thus losing out on profitsand competitiveness.

The garment sector, for instance, imports 55 percent of its needs.

The Government's website says the promulgation of new decrees such as12/2011/QD-TTG, is imperative for creating a legal framework that willenable State agencies to oversee and manage the sector.

The decree is expected to boost support industries for some keysectors like IT, electronics, automobiles, textile and garments, leatherfootwear, and technology.

It provides for giving priority in land allocation and lease.

Factories in a particular sector that are clustered in industrialparks will get priority in utilising infrastructure and other services.

They will also get assistance in labour recruitmentand training, financial assistance from the National Science andTechnology Development Fund and others, technology transfer, copyright,and hiring foreign experts.

The National InvestmentPromotion Programme this year would focus on attracting investment insupport industries and in private-public partnership projects ininfrastructure, Nguyen Thi Bich Van, deputy head of the ForeignInvestment Agency, said.

It would particularly turnto investors with expertise in these areas, especially from Japan andthe Republic of Korea , she said.

Vietnam 'sfirst support-industry park, which is coming up in the Que VoIndustrial Park in Bac Ninh, is a partnership between Vietnam andJapan .

The biggest challenge to attractinginvestment in support industries was the lack of clear policies andinformation about the field, Van said.

The new decree was likely to help make a breakthrough, she added. /.

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