Experts outline pathways to improve competitiveness

The free trade agreements which Vietnam signed and has been negotiating are expected to further boost access for domestic firms and their products to overseas markets.

The free trade agreements (FTA) which Vietnam signed and has been negotiating are expected to further boost access for domestic firms and their products to overseas markets. This in turn looks set to facilitate job generation, thus spurring economic growth.

Vietnam’s trade turnover was estimated at US$482 billion throughout 2018. As for the first two months of 2019, a positive figure of US$35 billion was recorded.

Local firms have tapped into the full advantages of exploiting traditional markets while maximizing efforts to increase market penetration and searching for new importers.

According to economic expert Vo Tri Thanh, Vietnam has taken advantage of furthering its integration into an increasingly globalized world. He underpinned his stance by the fact that the country has reached many FTAs and strategic partnership deals.

Local production and business activities are on the right track to keep up with global trends which advocate the establishment of production and value chains, the penetration of big markets, as well as a circle of capable entrepreneurs and investors.

Thanh raised concerns about the fact that accelerating trade protectionism, US-China trade tensions, and the pending Brexit process, are critical issues which could present a threat to policy instability and have adverse impacts on the global economy and trading.

Bui Thanh Son, Deputy Minister of Foreign Affairs, emphasized the need to take a more proactive part in global integration, heighten economic resilience, and to improve competitiveness edges.

The realization of commitments that Vietnam moves further along the global integration process is set to pose competitiveness-related issues at three levels, ranging from products, enterprises, and the nation, Son said.

He noted that a big problem remains on how to implement FTAs effectively with the aim of tapping into internal forces, improving productivity and competitiveness, and nurturing “rare Vietnamese genetic features” which could benefit the national economy.

Assoc. Prof. Dr. Vu Minh Khuong, a lecturer from the Lee Kuan Yew School of Public Policy (National University of Singapore), claimed that Vietnam’s growth model is heavily dependent on foreign trade, which in turn makes itself vulnerable to global fluctuations.

Khuong, who is also a member of the Macroeconomic Advisory Group for the Vietnamese Prime Minister, suggested that the country could found an economic reform council which is to focus on fostering reforms in line with global developments and facilitating free and fair trade.

Vietnam also needs to enhance its economic resilience to global economic developments with the country currently being at risk to market fluctuations, the lecturer said.

He noted that importance should therefore be attached to building institutions related to macro-economics, social issues, and others, adding that foreign loans should be restricted while efforts should be raised to better productivity and sustainability.

Khuong also called for sustained efforts to increase the efficiency of administration work and the reforms of economic institutions, as well as review and update administration - related scenarios which could include timely predictions.

Additionally, he underscored the significance of taking prompt actions in response to the wide-ranging impact that global trade competitiveness and protectionism have on the domestic economy.

Due attention should be paid to increasing exports and giving selective priority to foreign investment inflows, he suggested.