Vietnam’s average budget for export promotion accounts for only 0.003 percent of its annual export turnover and equals one-thirtieth of the world average rate of 0.11 percent. However, the effect of national trade promotion programmes is significant.
Three directions of trade promotion
Industry and Trade Minister Vu Huy Hoang recently signed Decision 1057/QD-BCT approving the first payment for the national trade promotion programme in 2012, which includes 46 projects submitted by 38 agencies. The budget is VND43.93 billion. According to the decision, the first session of the National Trade Promotion Programme 2012 includes export-oriented trade promotion, domestic trade promotion, and trade promotion in mountainous areas, border areas and islands.
Speaking about export orientation, Mr Do Thang Hai, Director of Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade, said: Vietnam still pinpoints key markets namely the United States, Europe, China, Japan, ASEAN, India, Africa, the Middle East, and South Asia. Successful trade promotion in these markets will help us complete the export target of US$108 billion in 2012. According to statistics, the annual export growth rate to these eight markets averages 23.5 percent. Some Asian countries are becoming more important export markets for Vietnam, with annual growth reaching 26.3 percent.
The second orientation of the National Trade Promotion Programme is to keep the home market, highlighted by the “Buy Vietnamese goods” programme encouraging Vietnamese consumers to give priority to Vietnamese products first.
The programme will support Vietnamese companies to bring more goods to the countryside and remote areas to set up and develop their distribution systems from their production bases to border areas, mountainous areas and islands. Cross-border trade with neighbouring countries will also be boosted. The programme will spend a handsome amount of money on organising regional trade fairs to help companies of all economic sectors introduce their products and services of high quality, diversified design and reasonable prices to consumers.
Budget - not determinant
The website of the Ministry of Industry and Trade reads “Because of limited budget, the first phase of the National Trade Promotion Programme 2012 has thus not satisfactorily met the needs of localities, industry associations and enterprises.” Mr Do Thang Hai added that the State Budget for trade promotion has tended to fall and the budget remains small, but trade promotion activities have brought in high results. With a budget of VND55 billion (US$2.5 million), trade promotion programmes brought in contracts worth US$800 million in 2011.
The year-to-year decline in budgets for trade promotion is true. In 2011, the budget for this work was VND55 billion, equal to 31.97 percent of the value in 2009 (VND172 billion) and 45.83 percent in 2010 (VND120 billion). But, the country’s export turnover in 2011 rose 30 percent to more than US$96 billion. Sales of countryside programmes climbed 24 percent year on year to over VND2,000 billion (US$100 million).
The Ministry of Industry and Trade proposed that the Government first allocate VND150 billion for the National Trade Promotion Programme in 2012. If this is approved, as many as 236 national trade promotion projects with a total proposed budget of VND316 billion will be carried out smoothly. Many of them are implemented at the request of the Government, including trade fairs in China, ASEAN and India. In the long term, from 2013 onwards, the budget for trade promotion will reach 0.01 - 0.05 percent of the country’s export turnover, excluding crude oil earnings.
Huong Ly
Vietnamese
