The Vietnamese Government has developed a range of policies to support industrial businesses in anticipation of a huge wave of foreign investment. This is considered an important boost for enterprises operating in support industries.
According to Deputy Minister of Planning and Investment Nguyen Van Hieu, the government is drafting a decree to encourage and develop support industries and build a favourable business environment to attract foreign investors to the field.
It is necessary to acknowledge that the support industries play a central role in the entire industrial sector, Truong Thanh Hoai, Deputy Head of the Ministry of Industry and Trade’s Heavy Industry Department, said.
Attempts to develop support industries must target key sectors and those that attract foreign direct investment (FDI), including garment, mechanics, electronics and assembling, he stressed.
Meanwhile, Shim Wonhwan, General Director of the Samsung Complex, said that if Vietnam failed to develop its support industries, the country will come to rely on external suppliers, thus weakening its competitiveness and hindering its sustainable and long-term economic development.
Therefore, industrial businesses need to try their best to gain a competitive edge, he noted.
Since investment in technology requires a large amount of capital, the Ministry of Finance and the State Bank of Vietnam should develop a mechanism that enables businesses to access long-term loans at preferential interest rates, Prof. Dr Nguyen Mai, Chairman of the Vietnam Association of Foreign Investment Enterprises (VAFIE), said.
Deputy Minister Hieu admitted that ineffective Government mechanisms and policies, combined with businesses’ limited technology, capital, production capacities, management experience and human resources, made FDI enterprises hesitant to join Vietnam ’s production chains.
Mai added that the support industries are not developing at a pace in line with the country’s full economic potential and that their products have low added value. Locally-made spare parts only account for 27.8 percent of those needed, while Thailand and China produce 60 percent and 50 percent, respectively, of their spare parts locally.
Statistics from the Ministry of Planning and Investment showed that Vietnam attracted close to 17,000 FDI projects so far, with a total registered capital of over 243 billion USD, from 101 countries and territories.
In recent years, FDI in the electronics industry increased remarkably, especially from the Republic of Korea (RoK), Japan and Taiwan .
Foreign-invested businesses have made Vietnam one of the top 10 electronics producers in the world within just over a decade, with a production value of 40 billion USD last year.-VNA
