Its "golden population" phase and other specific advantages can helpVietnam exploit well a slew of free trade agreements (FTAs), but thereis zero room for complacency, experts and leading industrialists havewarned.
They said that the agreements are a double-edged swordthat will open the domestic market up to stiff competition local firmsare ill-equipped to face.
The increased export opportunities also come with the challenge of meeting international standards, they added.
Vietnamhas inked FTAs, bilaterally and multilaterally, with many countries andblocs like the European Union and the Customs Union of Russia, Belarusand Kazakhstan. It is also a party to the Trans Pacific Partnership(TPP) that is being negotiated by 12 countries in the Asia-Pacificregion.
A recent VNA report quoted Le Phuoc Vu, Chairman of theTon Hoa Sen Group, as saying the FTAs can yield sizeable benefits forVietnam.
"We are clearly seeing that the global integration trendhas developed widely and global investment capital is heading towardsthe Southeast Asian region, including Vietnam. This is good for Vietnamas the country is currently in the ‘golden population' phase, offering alow-cost labour force and many investment opportunities.
"Therefore,the country can boast of having considerable opportunity to boosteconomic growth, promote exports of Vietnamese businesses and drawingcapital," Vu said.
The report also cited Vu Tien Loc, Chairman ofthe Vietnam Chamber of Commerce and Industry (VCCI), as saying the FTAswill motivate Vietnamese companies to speed up their restructuringprocess and create opportunities for local businesses to penetrate theworld's leading markets with a 0 percent tariff as well the lowering ofmany other trade barriers.
In particular, export opportunities tothe United States, Europe, Japan, the Republic of Korea, ASEAN, Russia,Belarus and Kazakhstan will be boosted. The country's key exportproducts include garments and textiles, footwear and farm produce.
However,Loc cautioned that rising technical standards require local businessesto international standards pertaining to product quality, food safetyand hygiene as well as proof of origin.
"All trade and productionactivities in Vietnam must meet international standards if we want topenetrate the markets of other countries. This is a key challenge thatlocal businesses must overcome," he stressed.
A VCCI report hassaid that up to 96 percent of Vietnamese businesses operate on small andsuper-small scales, and are weak in capital, technology and quality oflabour force. These factors limit local competitiveness, and in turn,their participation in the global production network.
Vu added tothis argument, saying that if businesses fail to receive capitalinvestment and are unable to tap opportunities to create highlycompetitive products, they will lag behind other countries in theregion.
Foreign corporations investing in Vietnam often bringsatellite enterprises with them, making it hard for Vietnamesebusinesses to enter the supply chain, he said.
Meanwhile, Vietnamlacks businesses that can assume a leadership position and guidesmaller businesses towards further development, he added.
Thereport cited other unnamed experts as highlighting several shortcomingsin Vietnam's private sector, including limited capital, technology andmanagement that affects local competitiveness.
Many domesticindustries including steel and fisheries have found it difficult toovercome technical barriers and deal with trade protection tools used byother countries, it said.
Apart from export challenges, Vietnamese businesses are set to face fierce competition in the domestic market, the report said.
Itcited a representative of the Truong Hai Auto Joint Stock Corporationas saying that with the roadmap for reducing tariffs gradually to 0percent, there is a great possibility of cheap automobile products fromother countries in the region, such as Indonesia and Thailand, enteringVietnam.
Do Huu Hao, Chairman of the Vietnam Association ofMechanics, who is also a former Deputy Minister of Industry and Trade,pointed out that the nation's support industry lags behind developedcountries.
The inability of local firms to produce hi-endproducts that can earn huge profits shows weaknesses that will bestarkly exposed during the integration process, he said.
Giventheir limited competitive capabilities, local firms expect more supportfrom the Government, the report cited both experts and industry insidersas saying.
Vu stressed that policy and other forms of supportfrom the Government, State management agencies, and trade promotionagencies is very important.
The nation must resolutely tackletrade fraud and counterfeit products, and local firms should have accessto long-term capital resources at more reasonable interest rates, hesaid.-VNA
They said that the agreements are a double-edged swordthat will open the domestic market up to stiff competition local firmsare ill-equipped to face.
The increased export opportunities also come with the challenge of meeting international standards, they added.
Vietnamhas inked FTAs, bilaterally and multilaterally, with many countries andblocs like the European Union and the Customs Union of Russia, Belarusand Kazakhstan. It is also a party to the Trans Pacific Partnership(TPP) that is being negotiated by 12 countries in the Asia-Pacificregion.
A recent VNA report quoted Le Phuoc Vu, Chairman of theTon Hoa Sen Group, as saying the FTAs can yield sizeable benefits forVietnam.
"We are clearly seeing that the global integration trendhas developed widely and global investment capital is heading towardsthe Southeast Asian region, including Vietnam. This is good for Vietnamas the country is currently in the ‘golden population' phase, offering alow-cost labour force and many investment opportunities.
"Therefore,the country can boast of having considerable opportunity to boosteconomic growth, promote exports of Vietnamese businesses and drawingcapital," Vu said.
The report also cited Vu Tien Loc, Chairman ofthe Vietnam Chamber of Commerce and Industry (VCCI), as saying the FTAswill motivate Vietnamese companies to speed up their restructuringprocess and create opportunities for local businesses to penetrate theworld's leading markets with a 0 percent tariff as well the lowering ofmany other trade barriers.
In particular, export opportunities tothe United States, Europe, Japan, the Republic of Korea, ASEAN, Russia,Belarus and Kazakhstan will be boosted. The country's key exportproducts include garments and textiles, footwear and farm produce.
However,Loc cautioned that rising technical standards require local businessesto international standards pertaining to product quality, food safetyand hygiene as well as proof of origin.
"All trade and productionactivities in Vietnam must meet international standards if we want topenetrate the markets of other countries. This is a key challenge thatlocal businesses must overcome," he stressed.
A VCCI report hassaid that up to 96 percent of Vietnamese businesses operate on small andsuper-small scales, and are weak in capital, technology and quality oflabour force. These factors limit local competitiveness, and in turn,their participation in the global production network.
Vu added tothis argument, saying that if businesses fail to receive capitalinvestment and are unable to tap opportunities to create highlycompetitive products, they will lag behind other countries in theregion.
Foreign corporations investing in Vietnam often bringsatellite enterprises with them, making it hard for Vietnamesebusinesses to enter the supply chain, he said.
Meanwhile, Vietnamlacks businesses that can assume a leadership position and guidesmaller businesses towards further development, he added.
Thereport cited other unnamed experts as highlighting several shortcomingsin Vietnam's private sector, including limited capital, technology andmanagement that affects local competitiveness.
Many domesticindustries including steel and fisheries have found it difficult toovercome technical barriers and deal with trade protection tools used byother countries, it said.
Apart from export challenges, Vietnamese businesses are set to face fierce competition in the domestic market, the report said.
Itcited a representative of the Truong Hai Auto Joint Stock Corporationas saying that with the roadmap for reducing tariffs gradually to 0percent, there is a great possibility of cheap automobile products fromother countries in the region, such as Indonesia and Thailand, enteringVietnam.
Do Huu Hao, Chairman of the Vietnam Association ofMechanics, who is also a former Deputy Minister of Industry and Trade,pointed out that the nation's support industry lags behind developedcountries.
The inability of local firms to produce hi-endproducts that can earn huge profits shows weaknesses that will bestarkly exposed during the integration process, he said.
Giventheir limited competitive capabilities, local firms expect more supportfrom the Government, the report cited both experts and industry insidersas saying.
Vu stressed that policy and other forms of supportfrom the Government, State management agencies, and trade promotionagencies is very important.
The nation must resolutely tackletrade fraud and counterfeit products, and local firms should have accessto long-term capital resources at more reasonable interest rates, hesaid.-VNA
