Improving export competition abilities: how?

(VLR) (Vietnam Logistics Review) The PM has just approve the Project of Improving Competition Abilities of Vietnam’s exported goods to 2020, orientation to 2030. The problem is how to reach the average growth by 20% on current figure on groups of key products.

(Vietnam Logistics Review) The PM has just approve the Project of Improving Competition Abilities of Vietnam’s exported goods to 2020, orientation to 2030. The problem is how to reach the average growth by 20% on current figure on groups of key products.

New targets

The project set the target of improving quality and added values on groups of products that have export advantages on export as agricultural and aqua-products by 20% to the year of 2020 and there are also targets of gradually increasing rate of agricultural and aquaproducts into markets of developed countries as EU, Japan and Korea… and of reaching an average export growth of 8% in the period of 2016 - 2020.

Groups of products that have priority for improving competition abilities include agricultural and aqua products as rice, coffee, rubber, aqua products, and pepper…, processing industrial products as textile, footwear, furniture, phones of all kinds and accessories, computers and electronic products…, and others as raw and subsidiary products for textile, shoe leather, plastic and plastic products, fertilizers and chemicals. Figures on key export goods showed that the target can be achieved if we can keep the current growth.

Reports from the Ministry of Industry- Commerce showed in the first seven months of 2017, the total export value estimatedly reached USD 115.2bn, an increase of 18.7%. Agricultural and aqua-products remain “bright spots” with the total export value in 7 months reaching USD 20.5bn, an increase of 14.7% year - over - year. Particularly, export coffee reached USD 2.1bn, an increase of 7.9%; rubber, USD 1.1bn, an increase of 59.2%, cashew, USD 1.8bn, an increase of 24.2%; vegetable, USD 2.03bn, an increase of 48.9%; rice, USD 1.47bn, an increase of 13.7%; aqua- products, USD 4.3bn, an increase of 17.5%; furniture and forestry products, USD 4.4bn, an increase of 10.8%...

Nguyen Quoc Toan, Deputy Director of the Administration of Processing and Development Agricultural Products said there are breakthroughs in the sector. Merely in the second quarter, shrimp export increased 28.2%, reached USD 938.9bn; 7-month cumulative reached USD 1.9bn, an increase of 15,6% year-over-year. Catfish products, although having some difficulties, reached the turnover of nearly USD 1bn in 7 months. Especially, vegetables surpassed rice to become a key export product with 7-month value reaching USD 2.03bn, an increase of 48.9% year-overyear. “With the current growth, the target of USD 33bn turnover for the group of agricultural and aquaproducts can be reached in this year,” said Toan.

Besides agricultural, forestry and aqua products, other groups of key export products as textile, shoe leather, computers and phones maintain a fairly good growth of over 18.1% to 40%.

The U.S has always been the largest market to Vietnam with turn-over of 7 months reaching USD 23.4bn, an increase of 9.9%; EU, USD 21.5bn, an increase of 12.8%; China, USD 15.5bn, an increase of 42.6%; ASEAN, USD 12.3bn, an increase of 27.1%, Japan, USD 9.6bn, an increase of 20.6%; Korea, USD 7.6bn, an increase of 26.4%... These are good signals for the export and good news for the economy. The export sector did not reach the planned target last year.

Where are the solutions?

There are many solutions suggested as restructuring productions by changing production methods and export. To agricultural products, changing from scattering production to large scale production with quality management from the stage of farming to stages of transport, processing, preserving and consuming. To industrial products, changing from pure outsourcing to production methods with high added value in supply chains.

In changing export method, changing from intermediary export to direct export; changing from export in term of FOB to export in term of CIF. Besides, changing export product structure in the direction of increasing products with high added values; developing assisting industry for sectors with export advantages; improving roles of enterprises with FDI in improving competition ability of Vietnam export products; maintaining and expanding markets for export products; carrying out branding works for national brandings, export product brandings and enterprise brandings.

At the same time, increasing national competition abilities; facilitating enterprises by helping them to cut costs; increasing abilities of Associations,

According to experts, the solution above are comprehensive and sufficient, but how to implement them effectively. There is a relative big distance from policies to implementation that needs efforts from all sides.

In fact, enterprises in Vietnam mainly small and medium sized with limited abilities in terms of capital, human resource, science- technical approaches and IT… Moreover, complicated administrative procedures take much time and cost (both officially and unofficially). Therefore, Vietnam enterprises are in the state of getting little things done.

For example, agricultural development with high-tech application is a proper policy. However, there are many barriers as there have been no criteria to define what aenterprise applying high-tech is, complicated bank procedures for capital loans, and property certificates…

The PM recently complained to Ministries, sectors and local authorities there are over 5,000 procedures, conditions, in which there are ministry with over 1,200 conditions and procedures. Implementing 5% - 10% of them, enterprises are dog-tired.

Besides subjective difficulties, export production enterprises themselves do not pay adequate attention to quality and do not join together to make valued supply chains.

After all, not only in the field of export but also in any fields, no matter how good policies and mechanisms are, doing things by halves from both management organizations and enterprises will surely result in nothing. Responsibility should be put in the first place to achieve planned targets.

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