It is the statement made by speakers and economic experts at the workshop “Resolution 13/NQ-CP, removal of export bottlenecks in 2012 and prospective for 2013” organized in Hanoi recently. The event is a good chance for businesses to obtain updated information about markets, to figure out better strategies to overcome difficulties in business production, export and better orientation for the coming time.
Numerous challenges
According to statistics, the total import-export turnover of the first eight months of 2012 reached nearly US$147 billion, in which exports achieved US$73.35 billion, up 17.8 percent and imports reached US$73.4 billion, up 6.7 percent over the same period last year. However, this growth is mainly in foreign companies (FDI-invested), with their contribution of more than 60 percent of turnover, including US$ 45.6 billion of exports and US$ 38.6 billion of imports.
It is notable that in addition to other items, Vietnam's major export products are also facing many challenges. Specifically, the textile industry is considering lowering the annual export target to around US$19 - 19.5 billion. Despite that, at the end of August, the total value of exports of the sector reached only US$9.72 billion and at this pace, the total exports will only reach approximately US$16 billion by the end of this year. As noted by the Vietnam Textile and Apparel Association (Vitas), the major import markets such as the US, EU and Japan are heavily affected by the decline in consumption demand. Countries offering the world's largest garment markets are also grappling with various difficulties. Therefore, they have reduced the price of export items by five-seven percent in order to enhance competitiveness. Mr Pham Xuan Hong, Vice President of Vitas forecast that in the 3rd quarter, export volume and orders provided to Europe and the United States continue to decline by about five percent compared to the 2nd quarter. The number of small businesses that face shortage of orders, are not profitable, cut down operation size or cease operation will continue to rise.
In the fisheries sector, according to the Vietnam Association of Seafood Exporters and Producers (VASEP), seafood exports have reached over US$4 billion for the last eight months, up 6.4 percent. Yet, the difficulties in Europe have exerted a huge impact on the sector. Particularly, the first quarter saw a decrease of 7.9 percent from the same period and the second quarter was even worse with a decrease of 15.5 percent. It is forecast to continue to decline until the end of the year. Export of catfish alone in eight months has dropped by 5 percent, to a modest value of only around US$1 billion. The EU market is considered the poorest consuming one with a decrease of 20 percent.
In addition, in the context of difficult conditions, import and export activities can hardly expect good development due to the huge number of dissolved businesses. The facts show that the export of state-owned enterprises is falling. In August, exports fell 8.5 percent against the previous month, leading to the total decrease of 1.9 percent for eight months. Although imports in August rose 4.5 percent against July, imports for the eight months were down 8.5 percent, leaving the trade deficit over eight months at US$ 150 million. This figure unveils the decline in production of the domestic corporate sector.
At the workshop, Economic Expert Dr Nguyen Minh Phong stressed that Vietnam's economy is undergoing growth recovery, but it is very slow. The immediate challenges will continue to last until 2013. Even worse, export activity is certain to face more fierce competition. Regarding the current difficulties of exporters, Dr Phong said that in every locality, most business sectors, across operation forms, have mounting debt, shrinking production and large inventories, causing great difficulties for export markets, while purchasing power and market share are contracting. It is hard to see positive signs in other markets (real estate, retail, securities, etc.) in coming time, as there is yet growth motive for investment due to modest purchasing power. The real estate market has not yet well recovered and stock market has not regained trust.
Removing difficulties for businesses
To remove bottlenecks for exporters and domestic producers, a representative from the Board of Reform and Modernization of General Department of Taxation revealed at the workshop the Ministry of Finance’s support measures, to be practical and effective, aiming to accelerate the implementation and disbursement of investment capital for projects and programs in their management scope, especially for investment capital from the state budget and government bonds. The Ministry will conduct reviews, or submit to competent authority to amend and supplement mechanisms and policies, and remove unreasonable barriers to investment in order to solve difficulties for business production, promotion of investment in all domestic economic sectors and foreign investment.
The representative further emphasized that in terms of reform of administrative procedures related to business production and investment, the sector will give due attention to tax and customs. Particular tasks include shortening of customs clearance time, encouragement of tax e-declaration, realization of tax payment via banking system, automation of procedures on tackling complaint and administrative issues and striving to reduce taxpayer compliance cost by 10-15 percent.
In addition, according to the experts, to help businesses remove difficulties, it is necessary to lower the interest rate, give priority to the rural agricultural sector, small and medium enterprises and enterprises producing goods for export and supporting industries. Simultaneously, it is important to remedy all obstacles, creating favourable conditions to speed up production in priority fields, especially agriculture and tourism service.
It is also essential to promote commercial investment and actively participate in the integration process. Focus is laid on the acceleration of both domestic and foreign trade and signing trade agreements with partners. Other tasks include the review of state budget allocated to trade promotion in 2012 and production of support options to expand potential markets.
Thu Ha
Vietnamese
