Illustrative image (Photo: VNA) Hanoi (VNA) – Vo Tri Thanh, Director of the Institute for Brand and Competitiveness Strategy, said export performance in 2018 was very positive.
Vietnam’s exports in 2018 reached an impressive over 240 billion USD, and the trade surplus also rose to the highest ever level. It is noteworthy that the domestic sector recorded an export growth rate higher than that of the foreign-invested sector.
Thanh said the achievement showed a remarkable change in growth quality.
[Trade surplus estimated at 7.21 billion USD this year]
Question: In 2018, Vietnam continued to post a trade surplus for the third consecutive year and a very high export revenue. What do you think about this?
Answer: It can be said that the export figure for 2018 was a very good result, because at the beginning of the year, we were cautious to set the target for exports, aiming for a growth of under 10 percent.
We set the target taking into account difficulties in the global economy, and the big possibility that economic and export growth could reduce quarter after quarter, which was a big difference from previous years.
But in reality, though slowing down through the quarters, the growth of exports (expected at 13-14 percent) still surpassed the target.
Secondly, besides the domination of FDI firms, domestic firms still showed good performance in some fields.
For example, the rising oil price helped the oil industry earn higher revenues not only for itself but also for the budget. The export of farm produce also reached a record value of 40 billion USD, with fruit and vegetables posting an impressive increase in value.
Some sectors with low added value also made remarkable improvements thanks to their ability to seize opportunities amidst challenges, such as textile-garment, footwear and furniture.
Question: Some said that trade plus is not sustainable because it was mainly generated by FDI firms, is that true?
Answer: Yes, I think so. We can see that we are still depending greatly on FDI firms, and there were still big fluctuations in the export of many major products even in the short term.
Our farm produce and other products are very vulnerable to outside shocks due to their low added value.
(Source: VietnamPlus) Question: In fact many domestic firms achieved high growth rates this year. Does this mean a breakthrough in the domestic sector’s development?
Answer: It is hard to say that it is a breakthrough development, but this is really a positive sign. During the recent 2-3 years, the FDI sector still accounted for more than 70 percent of total exports, but there are two things worth of attention, which I think are positive signs. First, the export growth of the domestic sector has accelerated, and even surpassed the growth rate of the economy’s total export.
Second, the export of farm produce, aquatic products, textile-garment, footwear and furniture has increased, and at the same time many domestic firms have made efforts to join the value chains such as improving designing and distribution work, in order to gain higher added value. But I think that is not enough to call it a breakthrough.
Vo Tri Thanh, Director of the Institute for Brand and Competitiveness Strategy (Photo: VietnamPlus) Question: According to many reports, Vietnam’s logistics costs remain high, and despite the trade surplus, Vietnam posted a high deficit in terms of services only. What is your assessment about this issue?
Answer: The import-export of services also showed a good growth, but the statistics work regarding the import of services was not really good. But this is not a problem of only Vietnam, but also of many other developing countries, including those in the region. The statistics are not as detailed and comprehensive as those of trade.
In the trade of services, Vietnam has always suffered from big deficits, and this is not surprising, as generally developing countries are less competitive in services, especially those with high added value. Vietnam is no exception.
Those problems are normal, but there is also another side, when there are fields in which Vietnam has great potential but it fails to tap into the potential. This means we should review our policies in those fields. For example in transport, especially sea transport, foreign partners usually have the bigger part, according to statistics of the General Statistics Office.
However, with the development of telecommunication and tourism, Vietnam’s export of services has improved.
An important issue in the export of services is to build competition capacity for domestic companies. For example, many Vietnamese travelled abroad and spent billions of USD for medical treatment, tourism or study, which is a form of importing services.
-Thank you.-VNA
