|
An uphill task in 2012
The trade sector has planned a modest export growth of 13 percent in 2012 despite a robust 33 percent increase in 2011. Experts say it is not an easy task to achieve as many economies are not out of the woods yet.
US$108 billion – an ambitious target
Deputy Minister of Industry and Trade Nguyen Thanh Bien has said that the US$108.8 billion export target in 2012 is a great challenge for the trade sector.
2011 was a difficult year for exports as the European debt crisis has taken its toll on many economies and trade protectionism has become more sophisticated. However, Vietnam’s export earnings hit a record high of US$96.3 billion in 2011, up 33.3 percent against 2010.
Notably, many export items gained sharp increases in both quantity and revenue, with 23 staples fetching more than US$1 billion each. A comparatively high growth was achieved in the European Union, Japan, the Republic of Korea, China, Africa and South-west Asia.
Economists say the high export growth has brought fresh impetus to overall economic growth, helping the Government stabilize the macroeconomy and the local currency (VND).
The fact is that Vietnamese exports remain dependent on the world market. Items which attained high export value did so mainly because of the global rising prices. Export items are mostly under manufacturing contracts or semi-processed.
Nguyen Duc Thuan, President of the Vietnam Leather and Footwear Association, points to the fact that the footwear industry relies heavily on the import of materials and manufacturing contracts with foreign partners.
“When global market prices rise, domestic production costs increase correspondingly, affecting the competitiveness of Vietnamese products,” says Thuan.
Other key export industries such as garments and electronic components are also largely dependent on imported materials. An insufficient supply of materials for these industries is a tough issue which has not been solved completely.
Weaknesses are attributed to modest State investment in export projects and especially the poor support industry which is in its infancy. Management agencies have not yet provided sufficient information for export businesses.
In addition, Vietnam lacks infrastructure facilities for export, such as ports, roads, and bonded warehouses. Services that support exports including power, water supplies and telecommunications remain highly monopolized. All these have driven up transaction costs and reduced the competitiveness of Vietnamese businesses and products.
New challenges
To boost exports, businesses have no choice but to maintain traditional markets and seek new outlets. However, unexpected complications remain in regional and global markets in 2012. Economies that have shown green shoots of recovery from the 2008-09 economic and financial crisis or those that have just ridden out the economic slowdown are struggling to surmount new difficulties in 2012.
Europe is Vietnam’s key export market, and exports will face with new challenges there if the European debt crisis is not handled properly. The Ministry of Industry and Trade is worried that the European crisis will affect America and Asian countries, many of which are Vietnam’s key importers.
Deputy Minister Bien says the global economic complications are exerting a negative impact on Vietnamese exports that requires prompt response from businesses. He cites rice as an example.
“Vietnamese rice sold well on the world market at a time in 2011 when the global market was in short supply and Thailand, the largest rice exporter, was struggling to cope with floods and decided to buy rice,” says Bien.
“Rice prices reversed quickly after India and Pakistan sold rice from their reserves, causing the price of Vietnamese rice to go down and fewer contracts to be signed. Although Vietnam exported approximately 7 million tonnes of rice in 2011, a record figure, difficulties lie ahead for rice and other key export items.”
To boost exports and expand outlets, Minister of Industry and Trade Vu Huy Hoang has asked businesses take advantage of trade agreements Vietnam has signed with other countries to fully exploit the major markets of the US, EU and Japan.
vietnamnet
|
