Vietnam Sees Marginal Increase in Exports

In the first seven months of 2008, Vietnam’s export turnover reached US$36.88 billion, representing a year on year increase of 37.7 percent. Although the growth is high, Vietnam’s exported goods have certain restrictions.

The volume of exports did not grow much. Several key export items like rice, coffee, rubber and pepper did not increase in volume, or rose very modestly. The quality of exported commodities remained low and had weak competitiveness. Local exporters encountered numerous difficulties in running their business, including narrower access to bank loans due to high interest rate and shortage of electricity.

In spite of the difficulties, this year’s export turnover is forecast to reach US$61.2 billion, according to the Ministry of Industry and Trade.

Mr Nguyen Chien Thang, Chairman of Vietnam Fine-art Handicrafts and Wood Processing Association, said: The wood industry now has certain advantages because European and US importers tend to shift their contracts to Vietnam. Currently, China has an annual woodwork export revenue of US$20 billion, compared with US$2.5 billion of Vietnam. If we win another US$1 billion worth of contracts, we will create a lot of jobs. Besides, the sources of imported timbers are now diversified because the demand and production in other nations fell due to economic slowdowns. With such advantages, the goal of US$3billion export turnover in 2008 is within our reach.

Mr Nguyen Duc Thuan, Chairman of the Vietnam Leather and Footwear Association, said: The goal of US$4.5 billion set for footwear industry is within reach and we even do better. Currently, we are receiving an increasing volume of contracts from foreign partners. Mr Bui Duc Thanh, Acting Chairman of Vietnam Cashew Association, added: Vietnam could export at higher prices. Thus, it is not necessary to worry about the realisation of this year’s export target. Mr Nguyen Huu Dung, Vice Chairman of Vietnam Association of Seafood Exporters and Processors (VASEP), affirmed that seafood enterprises will realise their goal of US$4.25 billion in export revenue this year. They earned nearly US$2 billion in the first six months.

Deputy Minister of Industry and Trade, Bui Xuan Khu, said: To increase export earnings in the last months this year, state agencies need to support exporters and local enterprises need to operate at their full capacities. To ensure capital and foreign currencies for enterprises, the ministry will propose the Government to instruct banks and credit institutions to provide enough capital for enterprises, especially exporters, with gradually decreasing interest rates. In the coming time, the Government will also set up interdisciplinary units to solve difficulties for enterprises. To lessen input difficulties, the Ministry of Industry and Trade will continue submitting the list of tax incentive commodities used for local export-oriented production. It will cooperate with the Ministry of Transport to settle the gridlock at the ports in Ho Chi Minh City and Haiphong City. It will also demand power companies not to cut electricity without prior notice to enterprises.

Besides, exporting enterprises need to improve product quality to increase export value, especially traditional goods like agricultural, forestry and aquatic products which will hardly be increased in volume. They need to scale up production, renovate technology and increase export of high-valued and fast-growing products. Trade promotion activities need enhancing to find new opportunities. Local materials should be maximised in exported items. Local firms should draw foreign investment capital and exploit traditional markets and neighbouring markets. Market information and forecast should be enhanced to support local exports, especially to discover and seek out measures to overcome technical barriers.

Mr Khu added: From the proposal of the Ministry of Industry and Trade, the Prime Minister has assigned the relevant ministries to apply a host of measures to support export. For instance, exporting firms are supplied with sufficient credits to purchase local materials for production and encouraged to diversify payment currencies. Meanwhile, state organs are being asked to accelerate administrative reforms in tax returns and customs procedures to facilitate exports.