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WTO proves boon, bane for economy
Viet Nam's succession to the World Trade Organisation has been positive for its economy but it also poses big challenges, according to the Central Institute of Economic Management.
"International economic integration impacts all sectors of the economy, especially international trade and investment, which boosts domestic production, creates employment, and reduces poverty," Pham Lan Huong, Head of CIEM's macro-economic policy division, told a seminar held in HCM City on Mar. 29.
After the country joined the WTO in 2007, foreign direct investment rose dramatically as did exports, she said.
Exports grew by 25.5 per cent in 2007-08, though it fell in 2009 due to the global economic crisis, she said.
FDI had also risen dramatically since 2007, Nguyen Dang Binh of the Ministry of Planning and Investment said.
Viet Nam attracted US$116.2 billion in 2007-09, 3.6 times the 2001-06 figure, he said.
Vo Tri Thanh, CIEM's Deputy Director, said the WTO accession had also revealed weaknesses like the poor quality of growth, human resources, and competitiveness.
Export growth had not met expectations, remaining confined to raw materials and low-value outsourcing.
After failing to prepare well for integration, the country struggled to cope with external factors, he said, pointing out that economic stability remained a serious concern.
"We integrate with the world because we want to renovate and develop our economy. However, our policy institutions have not, to some extent, kept pace with the changes emerging from the integration process."
The country had to continue with the innovation and integration processes, but also had to understand its economic status and strengths and weakness to adopt appropriate measures to improve competitiveness, he said.
In the current situation, the Government should stabilise the economy to retain the people's and markets' trust, he added.
Binh said the Government should review its WTO commitments and come up with ways to attract investment.
In addition, improving training and infrastructure and reforming investment procedures were very important to attract more investment, he said.
The country spent a lot of foreign currency on import of raw materials for export-oriented production, putting more pressure on the trade deficit and balance of payments, Huong from CIEM said, noting that to resolve this problem, the Government must develop support industries.
Education should be reformed to improve the competitiveness of human resources and to reduce unemployment, she added.
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