Developing product chains helps boost sustainable export growth
Updated : Thursday, August 09, 2018 3:17 PM (GMT+0700)

Developingproduct chains is an important solution to sustainable export growth, heard aconference in Hanoi on August 8.

Illustrative image - Source: VNA

Tran Thanh Hai, DeputyDirector of the Import-Export Department under the Ministry of Industry andTrade, said that product chains will help cut out intermediary, reduce goods’prices, raise the added value, and improve competitiveness.

Hai noted that Vietnam’sexports have seen strong growth in both scale and production ability. Totalexport value recorded a year-on-year rise of 21.2 percent to 214 billion USDlast year.

Notably, the exportsituation this year is forecast to have many opportunities for higher growth ascommitments for international integration have been implemented, helping reduceimport-export tariffs.

The efforts of theGovernment and ministries in administrative reform to provide a favourablebusiness environment have aided export activities, he said.

In the first seven months ofthis year, total import-export turnover reached 264.3 billion USD, up 12.7percent year-on-year, of which exports were valued at 133.6 billion USD, up15.3 percent against the same period last year, equal to 56.5 percent of theyear’s target.

 “This has been abright point in the economy with high export turnover. However, there are shortcomingsthat pose challenges for the country’s exports”, he added.

He noted that protectionismbecame more common in the first months of the year.

In addition, the country’sexports have depended on foreign directed investment (FDI) enterprises, whichaccounted for 70 percent of total turnover. This was because Vietnam has nothad an export value chain, he said.

As an example, arepresentative from the Vietnam Textile and Apparel Association said thecountry’s garment export value rose from 15.8 billion USD in 2011 to 31 billionUSD in 2017, accounting for 4 percent of the world’s total turnover.

However, the sector hasmainly performed cutting and sewing in the global garment and textile supplychain. Vietnamese garment and textile firms have participated in simpleoutsourcing and lack the ability to provide packaging, resulting in low addedvalue. The garment and textile industry has also relied on imported materials.The local companies have to import up to 86 percent of cloth for production andexports.

A similar situation has beenseen in the agricultural sector.

Vietnam has highagricultural output. However, most of its products have not been exportedwidely due to limited processing capacity. Agricultural and seafood productshave been mainly exported as raw materials.

Statistics from the Ministryof Agriculture and Rural Development showed that the country has 700agricultural chains certified as safe chains. However, only half of the totaloperates effectively.

Doan Anh Tuan, Chairman ofThe He Moi Tea Company Ltd, said most Vietnamese firms are small-scale and cannot afford to invest in material areas and modern processing and packagingequipment.

"Moreover, local firmshave not built their own brand names. The Government should have programmes toinvest into technologies to create competitive products and take a firm footholdin the international market", said Tuan.

Participants proposed thecountry build agricultural chains through consumption contracts betweenfarmers, co-operatives and businesses to have stable material areas. Inaddition, it should develop breeds with high output and use science andtechnologies in farming, harvesting, preserving, processing and consumption.

Experts said the supportindustry could be the foundation for sustainable exports, so the Governmentshould prioritise support industry development for sectors of mechanics, sparepare production, garment and textile and leather shoes.

The solutions could beeffective if the business community participated, they said.

Previously, Prime MinisterNguyen Xuan Phuc approved a plan to improve the competitiveness of exportedproducts in Vietnam to create a legal framework for sustainable exports.

The plan aims to increasevalue of key export staples by 20 percent by 2020.

It hopes to graduallyincrease exports of agricultural and seafood products to the EU, Japan and theRepublic of Korea markets in 2016-20 with average growth rate of 8 percent ayear.


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