Since Vietnam joined the World Trade Organisation (WTO) five years ago, it has enjoyed many benefits, such as better import-export market access and increasing foreign direct investment. However, the country has faced numerous challenges, said economic experts.
The country’s economic growth rate reached an average of 6.5 percent per annum between 2007 and 2011, or the post-WTO period. The figure was much lower than the 7.8 percent level recorded from 2002-2006 and far below the 7.5-8 percent target, according to a report by the Central Institute for Economic Management (CIEM).
A slowdown in the industrial, agricultural and services sectors was blamed for the below-target growth in the post-WTO period.
In the reviewed period, except for the agro-forestry and fishery sectors, the construction-industry and services sectors failed to meet expectations. The industry-construction sector alone - the country’s economic spearhead contributing up to 40 percent of national GDP - showed a sharp fall in growth compared to the pre-WTO period.
The country did not fulfil its 2010 economic restructuring plan as the set goals of the agro-forestry-fishery sector contributing 15–16 percent, industry-construction, 43-44 percent, and services 40–41 percent to GDP were unsuccessful.
It was argued that Vietnam was not well prepared for the challenges and therefore suffered a number of shocks.
Former CIEM official Dr. Pham Lan Huong blamed economic inefficiency for the slow economic restructuring, small scale and scattered production, and poor productivity and values.
Economic expert Pham Chi Lan wondered whether Vietnam used every opportunity that the WTO brought, adding that many policies have not yet been assessed in terms of their real impact on people’s lives.
At present, Vietnam ’s economy is showing signs of recovery, with low inflation, improved trade balance and increased currency reserves.
However, CIEM Deputy Director Vo Tri Thanh said fundamental challenges for the economy have not been addressed, such as inaccessible bank loans for businesses, low investment, bad debts and high industrial inventories.
Many policies have been introduced to ease the difficulties experienced by businesses and stimulate the economy, but some of these policies have not delivered results, he said.
Thanh stressed the core of the matter, including maintaining a stable macro-economy, streamlining administrative apparatus, and reducing lending interest rates to businesses. The immediate matter is the settlement of bad debts, lowering tax, and stimulating investment and sales, he added.
In addition, protective measures should be replaced by development policies linked to value production chains, improving the competitiveness of Vietnam ’s production sectors, he suggested.
Vietnam needs to accelerate administrative reforms to create a more favourable business environment, while encouraging businesses to take advantage of opportunities that arise from free trade agreements to expand into overseas markets.
The country also needs to introduce policies in line with its international economic integration commitments.
Former Trade Minister Truong Dinh Tuyen said that Vietnam needs preventative measures to help the agricultural sector avoid “shocks” when farm produce import tariffs are cut. Besides, farmers should cooperate with businesses in production, processing and sales.
Senior economic expert Le Dang Doanh suggested reviewing supportive policies for every sector.-VNA
