With the strategic partnership between Vietnam and Japan, the Japan International Cooperation Agency (JICA) has carried out many practical activities to help Vietnam promote economic development and develop support industries.

Talking with the Industry and Trade Review, Hayashida Takayuki, Senior Project Formulation Advisor of JICA, said that the support industry is an important field for businesses.

* What is your assessment of support industry in Vietnam?

It is difficult to give an assessment because individuals and organisations have different definitions while here in Vietnam statistics and business data remains inadequate.

We saw development when looking into individual businesses. Many businesses invested to replace their outdated technology with modern alternatives. Many companies were satisfied with strict requirements and provided parts and components for Japanese businesses. However, support industry in Vietnam is less developed than other countries in the region, such as Thailand and Indonesia.

* What are major reasons of the low development level?

There are many reasons, including objective ones. When other countries began developing the industry, Vietnam was dealing with the aftermath of the war. Vietnamese businesses were financially weak so they couldn’t invest in modern technology and workforce training, while these two factors are integral to support industry development. Interest rates in Vietnam remained high, making it difficult for businesses especially small to medium-sized enterprises to develop and accumulate finance. Policies for businesses remained inadequate and less concrete. State organisations and occupational and business associations failed to play an effective role in assisting businesses.

* What does Vietnam need to do to solve the problems?

We think that Vietnam needs to implement four main solutions related to policies, capital sources, workforce training and technical and business management at the same time. The State should define strategic fields for development, based on which to construct concrete preferential policies on finance, interest rates, tax, fees, workforce training, technology, and administrative procedure reforms for specific periods, aimed at encouraging domestic and foreign businesses to invest in support industries.

I emphasise that the support industry is for businesses. Businesses need to make more efforts to exist and develop. The media should contribute to making the government better informed about business information, wishes and proposals.

* What is JICA’s orientation for Vietnam?

With a programme for improving the support industry’s capability through senior volunteer assistance, JICA has an orientation for assisting small to medium-sized enterprises. At the same time, we will multiply the technical training and business training models through a cooperative programne with the Hanoi University of Industry and Vietnam-Japan Human Resources Cooperation Centre in the Foreign Trade University.

JICA will work with relevant Vietnamese ministries and sectors to construct policies for support industry development. However, we still encounter a number of difficulties due to the lack of connectivity between ministries and sectors. In the coming time, JICA will adjust operations in accordance with the joint target on industrialisation strategy upon which the Vietnamese and Japanese governments agreed.-VNA