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Nation urged to boost hi-tech investment
Viet Nam needs to pay more attention to attracting quality FDI resources as a foundation for development of hi-tech production and manufacturing.
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| Workers of the Ha Noi-based Ha Tay Chemical Wave Co Ltd check sport shoes for export. Viet Nam’s Competitive Industrial Performance (CIP) has jumped 14 spots in just four years, placing 58th out of 118 countries in 2009. |
The United Nations Industrial Development Organisation (UNIDO)’s managing director Wilfried Luetkenhorst made the statement at the launch ceremony of the Viet Nam Industrial Competitiveness Report 2011 held in Ha Noi yesterday.
Wilfried pointed out that industrial competitiveness was not or at least not entirely determined solely by a country’s factor endowment because it could make its industry vulnerable to competition, adding that competitiveness advantages could be created.
He said a good sign for Viet Nam was that it was one of the most improved countries in the Competitive Industrial Performance (CIP), ranking 58th in 2009 out of 118 countries and jumping 14 spots in only four years, thus becoming one of the most rapidly improving countries in the world.
The report showed that Viet Nam had overtaken strong competitors with a long industrialisation tradition such as Egypt, Morocco and Russia.
“This was a clear indication that Viet Nam was turning into a rising star on the global manufacturing scene and a threat to competitors around the world,” it said.
Manuel Albaladejo, an expert from the Research and Policy Advice Unit’s Department Polices and Strategic Research Branch said Viet Nam’s Manufacturing Value Added (MVA) growth had been impressive.
“Between 2000 and 2009, MVA skyrocketed from US$5.8 billion to $154 billion. MVA growth has gone hand in hand with economic growth. China, Cambodia and Viet Nam recorded the highest GDP growth rates for the period, implying that there is a strong link between industrialisation and economic development,” he said.
However, he said the country’s export growth should be interpreted with caution as Viet Nam’s trade pattern was heavily reliant on imports and domestic technological content was limited.
He added that the ability to shift production and export structures quickly to respond to changes in global demand was another important component of industrial competitiveness.
“Viet Nam has not quite benefited from the world’s demanded products despite improvements in the exports of dynamic products,” he said, adding that Viet Nam experienced trade deficits in 14 out of the 20 most dynamic products in the world.
The report highlighted that manufacturing growth was at the core of Viet Nam’s impressive economic performance over the last 20 years and that manufacturing must continue to play a major role in the future if Viet Nam was to sustain high growth rates.
It said the new strategy was needed to promote structural change and called for a new industrial policy that focuses on industrial transformation of strategic sectors that can support sustained growth and reap the benefits of technological change, innovation and learning.
While all manufacturing sectors were important, the report argued that a shift towards technology intensive sectors was needed to promote industrial deepening and value addition.
The report presented five key policy areas including reformulation of industrial strategies and policies, industrial diversification into high value-added products, human resources development for manufacturing, technology development and targeting quality FDI for manufacturing.
“The report would be deemed a useful document which supported policymakers in the formulation of industrial and trade policies that met the requirements of the realities of this new stage in Viet Nam, “ said Deputy Minister of Industry and Trade Le Duong Quang.
The report aimed to contribute to the existing policy drivers of industrial competitiveness, positioning Vietnamese industries in the international context, identifying industrial bottlenecks that could be addressed by policy and presenting specific recommendations for Vietnamese leaders.
The report argued that structural change towards certain strategic technology intensive sectors could speed up the industrialisation process, thus providing the right conditions for sustained growth.
The report was jointly carried out by MoIT and UNIDO in the context of the One UN funded programme “Building National Capacity in Industrial Diagnosis and Trade Competitiveness Analysis”.
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