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MOIT says Vietnam’s industries limp and reliant
If Vietnam does not focus on developing high technologies, but continues relying on the natural resources and cheap labor force, its technologies will never be competitive in the world market.
The 2011 Report on Industrial Competitiveness released by the Ministry of Industry and Trade MOIT and Unido on December 13, shows that Vietnam is the country which makes fastest progress in terms of industrial efficiency. However, even with the progress, Vietnam is still industrially stagnant in comparison with many other ASEAN countries.
Manuel Albaladejo, an Unido’s specialist, Director of the Project on increasing the industrial competitiveness for Vietnam, said that just within four years, in 2005-2009, Vietnam jumped four grades in the global industrial efficiency ranking, from the 73rd to the 58th.
Especially, the efficiency of the manufacturing of added value is considered as impressive. In 2000-2009, the index of Vietnam soared from 5.8 billion dollars to 15.4 billion dollars, which was directly proportional to the high economic growth rate.
The growth of the productivity of added value manufacturing activities of Vietnam has been described as overshadowed the China’s growth over the last decade.
Vietnam ranks the third in the region in terms of the diversification of the export markets for the industrial products, just behind China and India. Vietnam’s manufacturing products have been present in North America, the EU and North Asia. Thanks to the diversification of the export markets, Vietnam’s exports still keep stable even when the demand from some markets decreases, or when redoubtable rivals appear.
Talking about the link between industries and trade, the specialist said that Vietnam remains the only country which has not been seriously influenced by the financial crisis when its manufacturing exports have increased by 20 percent. Vietnam has been recognized as a big manufacturing center based on capital, just after China.
Industries still limp and reliant
However, the report has also pointed out a lot of problems of Vietnam’s industries. The biggest problem is that the country still has been relying on low technology industries, on the cheap labor cost as an advantage and on labor intensive industries.
In the last 10 years, the export of the products in the industries accounts for 70 percent of the total exports, while high-tech exports just account for 10 percent.
Experts have warned that with such a foundation, Vietnam’s industries would meet big difficulties in the world market. Foreign invested enterprises may withdraw from Vietnam when they can find the places which offer lower salaries and production costs.
Meanwhile, Vietnam still has been relying on China as the big material supplier. As a result, in order to boost exports, Vietnam needs to import more materials, which turns Vietnam into the country with big trade gap.
Le Huu Phuc, Deputy Director of the Internatinal Cooperation Department under MOIT has admitted that Vietnam’s competitiveness is clearly below that of other ASEAN countries.
Phuc said that in 1995, Vietnam once “dreamed” of making 2000 diesel engines per annum. Now Vietnam can churn out 40,000 products already. However, the achievement still cannot make Vietnam happy, because the added value per product remains very low, because sets of engine parts have been imported from China.
Experts have called on the government to apply reasonable policies to encourage the development of high-tech industries. “Vietnam will never be able to make a jump, if it continues developing industries based on its natural resources,” said Do Huu Hao, former Deputy Minister of Industry.
High technologies and the restructuring of industries are believed to serve as the key to help promote Vietnam’s industries.
“If Vietnam does not change the structure of the industries, if it does not think of developing high technologies, the current ministries, and the ministries in the future will still have to answer the questions to be raised from National Assembly’s Deputies about the high trade gap,” Hao warned.
Pham Huyen
vietnamnet
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