Strengthening Regional Linkages to Promote Local Strengths

9:27:56 AM | 9/3/2023

The current socio-economic situation of developed regions is not commensurate with their potential and advantages. The economic scale of these regions is still modest, and industrial production only accounts for a small proportion. These factors impact the achievement of rapid and sustainable development goals. Therefore, strengthening regional linkages to promote local strengths is of great interest to the regions.

Establishing a quality rice production area and developing value chain linkages based on a new cooperative model are key factors for the sustainable development of the rice industry

Key economic regions have not yet been brought into full play

According to Mr. Hoang Anh Tuan, Deputy Director of the Domestic Market Department - Ministry of Industry and Trade, the mechanisms and policies on regional linkage have achieved positive results over the past time. These include promoting the connection of supply and demand through national and local programs and schemes, organizing the implementation of plans on commercial infrastructure, and integrating regional linkage into other related fields and socio-economic development programs.

However, the key economic regions have not promoted their leading role, investment efficiency has not been high, poor areas have been unsustainably developed, the gap between regions has not been narrowed, and regional linkages are still weak, especially between provinces and cities.

Mr. Tuan stated that the value chain of regional linkage products is a key factor in ensuring effective regional linkage. However, it has not been clearly shown in the process of building regional linkage planning projects. The method of zoning socio-economic regions has revealed limitations and not brought into full play the comparative advantages of each region. Moreover, the value chains of inter-regional and intra-regional economic links have not been explored.

Mr. Nguyen Van Thinh, Vice Chairman of the Vietnam Cooperative Alliance, has pointed out that there are many shortcomings and limitations that reduce the effectiveness and efficiency of regional linkage activities. Furthermore, there are not many regional linkages supporting enterprises and cooperatives to form clusters of industry links. The linkages between localities in the regions are not systematic and therefore don’t bring into full play the potential and strengths of each locality.

According to the Vietnam Cooperative Alliance, by the end of June 2023, the whole country had more than 30,000 cooperatives. Therefore, regional linkage will improve the efficiency of the operation of the collective economic sector thanks to its large scale.

However, the production and business processes of cooperatives and enterprises reveal that, even in the field of agriculture, regional linkage still faces many difficulties and the value chain is still inefficient. As a result, many localities have not promoted their potential.

Revolutionizing conventional methods

To make regional linkage a driving force to promote local strengths in the coming time, Mr. Nguyen Van Thinh suggests that it is necessary to solve the challenges of regional linkage in localities and create information channels to promote linkages between local governments in the regions. This will contribute to increasing regional competitiveness, mobilizing resources to support regional linkage projects, ensuring sustainable socio-economic development of the regions. At the same time, propaganda should be organized to raise awareness and renew the mindset of civil servants and public employees about the benefits of regional linkage.

Mr. Nguyen Van Thinh has emphasized the need to break away from traditional ways of doing things. Regional linkages must be implemented in the direction of the knowledge economy, green economy, environmental protection, moving toward the 4th industrial revolution, developing industries with high technological levels, creating additional added value, and promoting the dynamism of industrial zones under the new growth strategy.

Dr. Tran Thi Hong Minh, Director of the Central Institute for Economic Management (CIEM), stated that in the context of integration, each locality and region in Vietnam must clearly understand their strengths, potential, and differences. They should have a reasonable division of labor and adjust and adapt to the current context, especially in shifting from traditional production and business methods to chain production methods. Enterprises and cooperatives need to transform in the direction of strengthening cooperation and connections with businesses in other localities in the regions.

According to Mr. Hoang Anh Tuan, it is essential for localities and regions to promote linkages, take advantage of infrastructure, science and technology, and human resources to develop regional and intra-regional economies. They should solve common problems related to climate change and environmental pollution. In addition, in the context of the volatile world economy, strengthening regional linkages to help enterprises and cooperatives connect and promote products becomes even more urgent. Especially after the impact of the COVID-19 pandemic over the past two years, many regional linkages still exist; therefore, imitations need to be overcome soon. Strategies, plans, policies, and mechanisms need to be completed to intensify regional linkages.

Mr. Hoang Anh Tuan suggests that policies should be implemented to support enterprises, cooperatives, and farmer households in provinces and cities. This will enable them to grasp the market situation and consumption trends to actively organize production and business toward stabilizing output and reducing losses for farmers. At the same time, support should be promoted to enhance the consumption of products between localities. This can be achieved by connecting the production and distribution enterprises of provinces and cities together, dominating the domestic market, and supporting the distribution of goods through a number of foreign channels operating in Vietnam such as Central Group, Aeon, Lotte, and MM Mega Market.

By Quynh Anh, Vietnam Business Forum