Making Defense Base Closely Linked with Civilian Industry

11:03:22 AM | 12/20/2022

Policy for strong industrial production development, coupled with the construction of industrial clusters in general and the defense industry in particular, will form industrial fortresses surrounded by supporting industries of high competitiveness to defend the independence and promote the development of a modern industrial country.

Former Australian Ambassador Craig Chittick grants the Certificate of Appreciation to Dr. Doan Duy Khuong, Australia Global Alumni Ambassador for Vietnam

For an economy, a product resource is a collection of physical assets, infrastructure, technology and other factors created by productive activities for the making of products and the delivery of services. Industrial products are an indispensable means of production and a fundamental resource for the efficient use of other resources to ensure national strength because this often makes an important contribution to four key macro goals: GDP growth and employment; main resources for the development of trade and services; narrowing trade deficit; and key contents for sustainability agenda, including national security and defense.

Given trade wars and armed conflicts in the region and the world amid the influence of the Fourth Industrial Revolution (4IR) as well as climate change and epidemics, we can see three megatrends that strongly affect products and industrial production:

First, the core: Global trade flows are changing rapidly along with the formation and development of international economic integration programs such as CPTPP, RCEP, the "One Road, One Belt" Initiative, and particularly the Indo-Pacific Economic Framework (IPEF). This development has led to two big areas that are being set up: Standards and product supply chains or, in other words, the market require quality products, the most accurate and fast standardized access to goods, because the ultimate goal of economic activity, production, and trade is to get products, not money, as money is just a means to buy products.

Second, sustainable development: Most interactions between natural capital and human capital to create products are created in industrial production. Therefore, industrial production consumes natural resources and causes environmental changes such as climate change, negative impacts on the living environment, as well as risks of material supply disruptions. The United Nations also warns that ecosystems on earth are degrading or altering and biodiversity is declining at a rate unprecedented in human history. This urgent issue requires a more efficient economic development model in terms of resource use, climate change prevention, pollution reduction and environmental degradation.

Third, industrial cluster: Industrial clusters include businesses, ancillary suppliers, schools, researchers and training facilities that support each other in a given space. The strong concentration of interrelated industrial production in regions is called an industrial cluster. Strong industrial clusters in an area will help strategically position the competitiveness of an industrial cluster in a global product supply chain in terms of productivity, employment and private investment to spur the economy and create powerful innovation.

In addition, world history shows that all nations have to build and defend their countries at the same time. Therefore, there is always a link between the military industry and the civilian industry as the proliferation of breakthrough military tech products such as computers, the internet, communication satellites and GPS appears for military purposes and then for the civilian industry. In particular, many researchers now argue that the flow of technology transfers was reversed following the end of the Cold War and that civilian industries played a leading role in technological development during this digital age.

In Vietnam, in addition to flexible foreign policies, the development of civilian industrial production is foundational for the creation of strategic defense weapons from the very beginning of national construction. For example, the Kim Quy Crossbow or improved SAM-2 missiles that shot down B52 Stratofortress bombers exactly half a century ago in Operation Dien Bien Phu in the air in the North decided victories in our defense wars.

In the past 10 years, Vietnam's industry has obtained remarkable achievements like increasingly contributing to the economy (accounting for more than 30% of the country's GDP and creating about 300,000 jobs a year on average). However, Vietnam's industry has not been able to meet the industrialization and modernization requirements of the country in recent years, mainly following short-term development goals, lacking sustainability of competitive productivity, quality standards and having weak interconnectivity of industries, including military and civilian industries, in national and global product supply chains.

The 13th National Party Congress clearly states that industrialization and modernization will drive our country to become a modern industrialized country. The 10-year Socioeconomic Development Strategy for 2021-2030 states that the goal is to increase the share of industry in GDP to over 40% by 2030.

To carry out the above task and ensure product resources to maximize foundational strength, it is necessary to have an industrial production policy focusing on the following five contents:

First, research and development on product standardization: In the era of "Internet of things", all products must have appropriate standards and specifications to be automatically interconnectable and achieve maximum performance. The current railway system in our country is not effective mainly because its standards are backward for transportation, loading and unloading freight and moreover, it cannot connect with other transport infrastructure such as roads, waterways, airways and especially with international technical infrastructure.

In addition, all product resources are the result of industrial production, so research, construction and development, as well as international cooperation are needed to perfect product standards such as "Made in Vietnam” and related standards (in all technical, environmental and social aspects) to ensure fair competition among businesses and good product quality for economic development and effective international integration.

Second, lifelong learning in business: We all know that the working class in our country is newly formed and developed. Moreover, besides the training budget, staff time is limited in the context of rapidly changing professions. So, digitally-enabled lifelong learning as it evolves today is an important part of achieving performance goals. Nevertheless, without connecting learning with performance, businesses will never get the benefits of lifelong learning. It is important to ensure that every employee has the opportunity to choose a training goal that they are truly keen on and that will consistently help their job performance and become tied to their personal career development.

Third, improved access to finance: It is necessary to have planning and strategic policies for core manufacturing and industrial sectors in the digital age to have appropriate fiscal and monetary policies to effectively support these industries substantively and professionally. In particular, pricing, tax and bond policies should be researched and effectively managed to support industrial manufacturing sectors with innovative and influential products such as logistics, energy and high technology, rather than create billionaires who get rich on price differences due to inadequacy of non-market policies such as speculation, collusion, price manipulation, land use planning (changed for the purpose of use based on terms of office of authorities) and double-price land policy.

Fourth, sustainable development: Strengthening worker roles in tripartite labor relations to make sure that an industrial manufacturing market has advanced and sustainable wages, working conditions and insurance policies for the workforce. It is necessary to establish an independent and professional system of owner representation (mainly pioneering industrial manufacturers) to ensure the long-term practical and effective operation of tripartite mechanisms in planning industrial production development policies in the digital age. In addition, it is necessary to develop and gradually apply a more effective economic development model such as from a linear economy to a circular economy. This is also a solution to go firmly on the road to sustainable development with a green, low-carbon economy to achieve the Paris Agreement with net zero emissions by 2050.

Fifth, linking industrial clusters: The development of the industrial manufacturing sector without close regional cohesion will affect competitiveness and maximize advantages while wasting resources and unbalancing the economy of scale in a regional economic ecosystem space and ultimately falling into international debt traps. Hence, it is necessary to have the policy to build industrial clusters, including civilian and military industrial clusters to build and defend the country.

The defense industry has developed advanced technologies to ensure the superiority of national power and civilian industries have benefited from military technology development. Therefore, dual-use applications are very important to commercialize and employ these technologies for both sides and to achieve common development. To ensure sustainable growth, the defense industry needs to improve and strengthen relations with domestic civilian industries.

Keeping the peace is one of the important issues and top priorities for countries and the whole world. There is a historical and global consensus that peace can only be maintained by good deterrent forces. Therefore, having a well-organized defense, developed and closely linked with civilian industries is an indispensable tool to safeguard citizens and defend national interests. Not only armed forces and security forces, but also industries, including the defense industry, are a major component of the all-people national defense. For that reason, developing civilian industrial production in association with the defense industry must be the focus of economic development policies to create miraculous Vietnamese products.

Strong industrial production development policy together with industrial clusters, including the defense industry, will form industrial fortresses with surrounding supporting industries of high competitiveness to protect independence and promote the development of a modern industrial country. Interlinked industries are the highest expression of the undying traditional solidarity of the Vietnamese people and portray a vivid image of green bamboo growing together to form wonderful clusters of bamboo firmly rooted in the Vietnamese motherland to protect the peaceful homeland village against the harshest storms. The industrial cluster development strategy, harmoniously integrated with the foreign policy built on President Ho Chi Minh's philosophy of "fixed to goals, flexible with approaches and actions", will certainly ensure the permanence and power of the nation.

Dr. Doan Duy Khuong - Australia Global Alumni Ambassador