To curb inflation and strengthen macroeconomic stability, the first measure economists and businesses favour is to promote exports. To provide an insight into this practical demand, the Vietnam Bank for Investment and Development (BIDV) recently collaborated with the Central Party Office, the Ministry of Industry and Trade, and the Vietnam Chamber of Commerce and Industry (VCCI) to organise a seminar on “Promoting exportation of Vietnamese enterprises to curb inflation and stabilise the macro-economy” in Ho Chi Minh City. The event drew broad participation from business associations and exporters.
Although export turnover of all commodities still increased remarkably, exporters remain distressed because the rise in export value is mainly accrued from soaring prices of raw materials, while the export value of products with intellectual content and products processed by advanced technologies remains low. Export turnover of some commodities has also dropped, like electric wires, cables and chemicals. Meanwhile, Vietnam still suffers a trade deficit. The country spent US$67.57 billion on imports in the first eight months of 2011, up 26.4 percent over the same period in 2010, of which domestic businesses accounted for 55.1 percent and foreign-invested firms took up the remaining 44.9 percent. The country incurred a trade deficit of US$6.21 billion in the first eight months of this year, mainly resulting from big imports from China, South Korea and ASEAN countries.
Therefore, many companies complained that they suffered huge losses accrued from rising input costs like wages, fuel, raw materials and lending rates. Indeed, the surplus in export revenues is offset by additional costs, limiting profits. Nguyen Cong Hoang, Deputy General Director of Vietnam National Coffee Corporation (Vinacafe), said coffee prices are currently relatively high and the industry expects to rake in US$2.5 billion of export turnover in 2011. However, coffee companies did not enjoy much from this increase because of exorbitant lending interest. So far this year, Vinacafe has spent over VND300 billion on lending interest, a handsome amount to most Vietnamese concerns, particularly in a time of spiralling inflation and economic slowdown.
Mr Vu Duc Thinh, Managing Director of the Vietnam National Textile and Garment Group (Vinatex), said his group’s export revenues reached US$1.6 billion in the first eight months of this year, a year on year rise of 26 percent, but profits remained low due to soaring input costs while selling prices were fixed by contracts signed earlier this year.
Sharing opinions with Mr Thinh, representatives from the Vietnam Rubber Association, the Vietnam Coffee and Cacao Association, the Vietnam Pepper Association, and the Vietnam Cashew Association, as well as officials from wooden furniture, plastic, coffee, seafood, and agricultural companies also expressed their difficulties in exporting, particularly pressure from rising inflation in importing nations. In the country, the enforcement of tightened monetary policy narrowed credit access for many companies, especially small and medium ones. Without timely measures addressing these hardships, many companies will fall into bankruptcy.
Mr Do Thang Hai, Director of Vietnam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade, said the Ministry of Industry and Trade is submitting the Vietnam export development strategy from now to 2020 to the Government. Accordingly, to boost support for businesses and expand exports, the ministry will continue expanding and diversifying export markets, efficiently utilising market opportunities and privileges according to international commitments. Vietnam will reduce the exportation of raw materials and increase the proportion of processed products, expand the shipment of high value, fast-growing exports produced by modern technology. Besides, the ministry will intensify market information, research and forecast to help exporters in Vietnam penetrate deeper into foreign markets and step up trade promotion activities. It will also help Vietnamese businesses take part in non-production stages and approach consumers abroad.
Mr Tran Duy Hung, Deputy Director of Division 2, the Central Party Office, said: Vietnam’s exports are estimated to top US$90 billion in 2011 while its imports are projected at US$110 billion. The trade gap remains relatively large and narrowing it is a top target for Vietnam. He said, “We very much want to listen to candid and responsible opinions from businesses. The Central Party Office will review and generalise accurate comments to report directly to the Politburo and the Party Secretariat for solutions to deal with difficulties and problems and work with the business community to boost Vietnam’s exports this year and in subsequent years."
Dr Vu Tien Loc, President of VCCI, pledged to collect all remarks on difficulties and problems facing businesses as well as their proposals to submit to the Government and relevant bodies for joint solution and support in favour of export expansion.
Thanh Tan
Vietnamese
