Finding Solutions for Exporters

According to the statistics of the Ministry of Industry and Trade, in the first 4 months of 2012, the macro-economy had improved. In particular, the trade imbalance narrowed. Export turn-over reached US$33.4 million, higher than that of the same period last year.

 

Export growth was achieved in 2 sectors. The foreign invested sector reached higher absolute turn-over and growth rate than the domestic economic sector compared to the same period last year. There are 10 exports reaching over US$1 billion. Regarding export markets, the past 3 months saw 12 markets reaching over US$500 million, among those, 4 markets achieved over US$1 billion which are the USA, Japan, China and South Korea.

 

The figures are a good sign of export. Vietnam’s exports increased mainly due to two advantages: competitively low-prices and essential export products that consumers can hardy cut off. However, according to experts in the forum, though exports in the first 4 months were substantial, it’s still challenging for Vietnamese enterprises, especially in the context of economic fluctuations, to achieve the export turn-over target of US$108.5 billion and make Vietnam the fifth biggest exporter in ASEAN in 2012. Agro-forestry-fishery products continue to face problems related to food hygiene and safety. The competition is now tougher and takes place on a larger scale, while Vietnamese enterprises and their products are still limited. As expected, the major difficulties that exporters continue to face in 2012 include order decline, lack of raw materials and market information, price fluctuation and exchange rate risks.

 

Ms Pho Nam Phuong, Director of ITPC, said that the survey conducted from mid-2011 to the end of March 2012 among 3000 enterprises operating in the city (of which 90 percent are exporters) showed that up to 30 percent of the enterprises have declining orders, 23 percent lack market information, and 16 percent are unable to access credit. Besides the difficulties in finding markets for products, exporters also have weaknesses in building brands and business image, managing land and hiring plants. Through this forum, ITPC wanted to help enterprises find compatibility between Vietnamese products and export structure and policies in the major markets, as well as update the Government’s new financial support policies for enterprises.

 

According to Dr Vo Tri Thanh, Deputy Director of the Central Institute for Economic Management, with the export growth rate increasing 22 percent in the first 4 months, the target of rising 12-13 percent this year will be within reach. However, the growth also revealed many weaknesses, exports increase mostly in FDI enterprises with the rate of 36 percent, while the number is only 4.4 percent in domestic enterprises, the lowest rate compared to previous years. In order to complete the export target for the whole year, issues related to improving competitiveness in exports for Vietnamese enterprises should be placed on top.

 

Agreeing with Mr Thanh, former Minister of Planning and Investment Tran Xuan Gia said that the core of long-term export growth lies not only in growth methods and total number of export products, but mostly in domestic enterprises’ competitiveness and dynamism. Moreover, sudden drop in trade deficit in the first 4 months expressed the difficult situation in investment and the decline in domestic production. As we can see, the trade deficit in the first 4 months is only US$176 million, accounting for only 0.53 percent of the total export turn-over. In the situation of trade deficit declining, it is necessary to prepare for exports in 2013 and the years ahead.

 

Facing with those challenges, economic experts recommended that the Government take measure to halt economic decline, support enterprises to overcome difficulties and maintain stable business activities. Especially, the Government should pay special attention to helping enterprises reduce production costs by cutting inappropriate fees, exempting or reducing for a period of time some charges and delaying the implementation of new fees, thereby decreasing pressure on business costs. In addition, to help enterprises access capital, the Government should create favourable conditions for them to restructure debts as well as easily access bank loans.

 

In addition to practical support from the Government, it is essential to have the flexibility and sensitivity from the business itself through restructuring, innovating management in a fast and scientific way, as well as focusing on product diversification and quality improvement, actively overcoming difficulties and improving stability and efficiency.

 

Vice Chairwoman of Ho Chi Minh city People’s Committee, Ms Nguyen Thi Hong said that to accompany businesses in overcoming difficulties, city leaders are willing to create favourable conditions for enterprises not only to stabilise production and improve efficiency, but also enhance growth and increase export turn-over.