This is the theme of a seminar held in Hanoi by the Vietnam Chamber of Commerce and Industry (VCCI) in collaboration with Japan Economic Foundation (JEF). The purpose of the workshop was to help Vietnamese businesses to have an overall view on Vietnam Industrial Development Strategy with vision towards 2030, and on electronics and food processing industries as well as industrial cluster development.
Speaking at the seminar, Ms Pham Thi Thu Hang, VCCI General Secretary, said that Vietnam's economy is integrating more deeply into the global economy but the growth pattern and industrialisation process have exposed a number of weaknesses like extensive development driven by low-cost labour, capital intensiveness, low labour productivity, simple processing and assembly with low added value. Therefore, Vietnam needs to improve its competitiveness, work out strategies and focus on developing clusters of industries to achieve set targets.
She noted that the Vietnam - Japan Economic Partnership Agreement and Joint Statements are opportunities for Japan to help Vietnam build an industrialisation strategy, which focuses on a number of sectors of mutual interest and development priorities. These documents can also bridge the two countries’ businesses and help Vietnam attract foreign direct investment (FDI) flows. In 2012, Japan remained Vietnam’s largest investor in both the number of projects and capital.
According to the Central Institute for Economic Management (CIEM), the success of East Asia, especially Japan, in employing industrial policy as an important tool for the Government to develop industry is good practical experience for Vietnam to study. By signing the Vietnam - Japan Economic Partnership Agreement, Japan will continue to be an important strategic partner of Vietnam in the coming time. In implementing the contents of Joint Statement concluded by the two countries’ leaders in November 2011, Vietnam hopes Japan will help it develop and implement the industrialisation strategy, which focuses on some industries of mutual interests and development priorities. This is the driving force for Vietnam to accelerate the process of industrialisation to realise the target of becoming a basically industrialised nation by 2020.
Besides, the development of inter-industry clusters to power up local economic development is an issue of deep interest of localities. Mr Nguyen Trong Hieu, Deputy Director of Business Development Department under the Ministry of Planning and Investment, industrial clusters in Vietnam are mainly developed without long-term plan featured by weak sustainability, low dynamism and lax interrelationship with companies inside and outside clusters.
Besides, Vietnam lacks effective strategy and policy to form and develop associated industrial clusters. To quickly make Vietnam a modern industrialised country, each locality should be a small economic region and promote its advantages, he said. To achieve this goal, the development of industry clusters is a necessary step.
He said each industrial cluster is formed by some of leading companies in the region. Besides, each cluster needs a network of suppliers and a basic foundation constituted by human resources, good technology, capital accessibility, good business environment and basic infrastructure. Inter-industry clusters will support local economic restructuring and accelerate industrialisation process. For enterprises, the clusters will help them increase their competitiveness by increasing productivity, renovating and creating opportunities for business companies.
Regarding overall solutions, Mr Hieu suggested local authorities need to raise awareness about clusters, build and complete industrial zone and export processing zone planning attached to cluster development.
Ms Nguyen Thi Tue Anh, Head of Business Environment and Competitiveness Committee, CIEM
Vietnam's industrialisation strategy is created to implement the Joint Declaration signed by the two leaders at the end of 2011. The construction and implementation of this strategy is a practical action for Japan to quicken Vietnam’s industrialisation. Vietnam also expects to draw FDI flows from Japan for some selected priority industries included to industrialisation strategy.
The overall objective of the industrialisation strategy is to "Select some industries Vietnam has potentials and Japan has interests to develop into strategic industries with high competitiveness and strong ripple effect on other industries, and promote Vietnam’s productivity growth through Japan's support for Vietnam. This is seen as a typical model for planning and implementing industrial policies in the future."
The two sides agreed on six industries for development priority towards 2020, including (1) Electrical appliances/Electronics, (2) Food processing, (3) Shipbuilding, (4) Agricultural machinery, (5) Environment and energy saving, and (6) Automotive and parts manufacturing.
The chosen sectors have huge potentials for rapid growth and have high demand in both domestic and export markets. Food processing, agricultural machinery and shipbuilding sectors have great potentials for development but have low productivity and competitiveness. Meanwhile, electrical appliance/electronics and automotive industries have rapid growth in recent years and contributed significantly to export but they are only limited at assembly because of the absence of supporting industries and input materials. Environment and energy-saving industry is relatively new and this sector will go up together with the process of industrialisation like industrial waste treatment, environmental protection equipment and energy savings. Therefore, the expansion of these industries must go hand in hand with increasing added values of products. They also need State support in the form of industrial development promotion policies.
Mr Shimomura, Japanese Embassy in Vietnam
We always know that top-line products like oil, gas and iron are essential for higher development process. Currently, many oil, gas and iron projects have been started, and will definitely succeed. The link between top-line products and the chosen industries in the industrialisation strategy are the key factors for development till 2020. That is the industrialisation strategy we propose.
However, if we only have strategy, it will not work at all. We need to take action. I hope the industrialisation strategy will help relevant agencies to work out specific "action plans" and these "action plans" will make the industrialisation process as powerful as a locomotive.
Deputy Prime Minister Hoang Trung Hai said the industrialisation strategy would be completed in this March and the "action plans" would be completed in the third quarter. We need to add effort to keep the schedule of these plans.
Quynh Anh
Vietnamese
