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Nation losing competitive edge

Update: December, 08/2012 - 09:25

 

Workers of Hanel Co in the Ha Noi's Sai Dong Industrial Zone produce computer parts for Canon Group. Many enterprises, mostly small- and medium-sized firms, reported a growth rate of 50-60 per cent this year thanks to good management practices that brought them into the global value chain. — VNA/VNS Photo Ha Thai
HA NOI (VNS)— Over the last two years, Viet Nam went down 16 places in the global competitiveness index, devolving into a mere production economy, said experts at a workshop held in Ha Noi on Thursday.

Regaining a competitive advantage, they agreed, was essential as the global economic downturn continued and countries became more integrated.

President of the Viet Nam Chamber of Commerce and Industry (VCCI) Vu Tien Loc said that Viet Nam had focused too much on developing the scale of the economy rather than its quality. Although the country had tried to address this problem for a decade, he said, few strides had been made.

"The economic shock forced many enterprises out of the market, leading many projects to grow stagnant," Loc said. "This will push enterprises to seek new competitive advantages."

Director of the Viet Nam Economics Institute Tran Dinh Thien said Viet Nam was wasting its rich potential, pointing out that the production level and labour productivity had not seen improvements despite increases in foreign direct investment (FDI) that poured billions of dollars into the country.

Looking at exports, Thien pointed out, FDI enterprises surpassed domestic enterprises in terms of turnover.

"Viet Nam has had a number of opportunities to improve its competitiveness, but failed to grasp them," he said. "Viet Nam is currently simply a production economy."

Director of Fulbright Economics Teaching Programme Vu Thanh Tu Anh reinforced this argument, pointing out that Viet Nam mainly exported physical products and natural resources.

According to Loc, a recent VCCI survey revealed that 30 per cent of domestic enterprises planned to expand production in the coming years.

"Expanding production in these difficult times means placing a priority on increasing quality, labour efficiency and sustainable development," said Loc.

Many enterprises, mostly small- and medium-sized firms, reported a growth rate of 50-60 per cent this year thanks to good management practices that brought them into the global value chain.

General director of FPT Group Truong Gia Binh said enterprises should apply modern technology to production to enhance labour productivity as well as competitiveness.

Viet Nam should also continue to develop high-quality human resources, he said, as young workers from rural areas would bring a competitive advantage to the economy if they were provided with good training.

According to Nguyen Thi Tue Anh from the Central Institute of Economic Management, low-skilled labour and underdeveloped infrastructure were the two biggest problems facing the country and should be tackled immediately.

If core industries saw breakthoughs, she said, this would motivate other industries to develop. These breakthroughs could be stimulated by stabilising the macroeconomy, reforming State-owned enterprises and involving the private economic sector.

Viet Nam ranked 75th out of 144 economies in the Global Competitiveness Index 2012-13, according to a report recently released by the World Economic Forum. — VNS

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