Businesses Need to Be Active Contributors to Vietnam's Export Improvement in 2013

In the context of difficulties and challenges of the economy, under the direction of the Government, the efforts of branches at all levels, the business community and people, the domestic economy has obtained positive changes and achieved remarkable results: economic growth rate in 2012 of about 5.2 percent; stable agricultural development; high industrial production growth rate; exports increased by more than 18 percent, 5 percent higher than the targets of the plan. For the first time after 20 years, Vietnam enjoyed trade surplus, estimated at US$284 million.

 

Entering 2013, the import and export of Vietnam continue to face many difficulties due to the influence of global and domestic economic issues. Most of the key export markets of Vietnam are facing internal problems in 2013. Specifically, the US economic recovery is still fragile; the EU continues to face debt crisis; the growth rates of many countries tend to slow; and Japan's economic growth has not been improved. These will make it difficult for Vietnamese exporters to develop markets, find partners and raise output for export. In addition, the exploitation of new markets will be faced with barriers of protection policy and competition from other exporting countries.

 

In the domestic market, bad debt and inventory continue to be two bottlenecks of the economy in 2013. These affect the export growth of domestic businesses, especially small and medium enterprises. Subsequent difficulties of enterprises in the country today are the issue of access to loans and interest rates. In 2012, the average interest rate for loans has fallen sharply from 18 – 20 percent / year to 12 – 13 percent/ year. However, this rate is still too high compared with loans of FDI enterprises. The FDI enterprises have the advantage of low-cost capital and their export market so they have had breakthrough growth in 2012.

 

Besides, due to the difficulties of the economy, problems with access to capital and high interest rates, domestic firms have limited investment in production and expansion in 2011 – 2012. This will affect export growth in 2013 and subsequent years. Exports of agricultural products have reached the threshold, which is unlikely to increase in volume. In addition, a number of industrial products with high growth in 2012, such as computers, electronic products and mobile phones are hard to maintain high growth rates in 2013 due to production capacity reaching its threshold.

 

Mr Tran Thanh Hai, Deputy Director of the Department of Import and Export (Ministry of Industry and Trade) said that in the context of challenges of export activities in 2013, the government and the ministries have proposed solutions to remove difficulties for production and boost exports. Specifically, the Government continues to take measures to overcome the stagnation of production such as solving inventory, supporting markets, implementing fee and tax exemptions in order to support and promote domestic consumption. Focus on solving the problem of capital and the interest rate for production and export businesses; building mechanisms and policies to support the consumption of agricultural products, aquatic products of major commodities such as rice, seafood, and coffee; and researching and building temporary storage policy for price stability and source of goods for export.

 

The government also strengthens the role of export quality control of the state agencies to improve the reputation of Vietnamese exported products, avoiding warnings of sanitary regulations food safety from the export markets. At the same time, the government further strengthens propaganda, guides enterprises to access new markets, takes advantage of incentives through the FTA and makes good use of favourable conditions for market access and tariff cuts for partners to boost exports and improve the efficiency of Vietnam’s export goods to FTA markets.

 

However Mr Hai recommended that in addition to support of the State agency, the business itself must actively seek export markets, find opportunity in challenge, stay updated on world and national news, seize opportunities, solve problems, and promptly report to the State agency difficulties beyond their resolve to strive to boost exports.