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Reforms needed to exploit trade pacts

Update: December, 20/2013 - 08:42
Enterprises in Viet Nam were facing many difficulties, including a gloomy real estate market, bad debt caused by ineffective public investment, and ailing State-owned enterprises.— Photo cafef

HA NOI (VNS) — Viet Nam needs to enact reforms so it might take advantage of economic integration agreements, said Le Dang Doanh, former head of the Central Institute for Economic Management.

Speaking at a conference to review Viet Nam's economy this year, and discuss the outlook for next year, Doanh highlighted opportunities that Viet Nam could take advantage of in the near future thanks to economic integration agreements.

The conference was held yesterday by the Foreign Trade University's Institute of Economics and International Trade.

For example, by 2015 when the ASEAN Economic Community is expected to form, the country can expand its markets, at least to Cambodia and Myanmar.

Furthermore, if it is successful in signing the Trans-Pacific Partnership Agreement, it can attract more investment in agriculture from Japan since, at that time, Japan would open its agriculture market. Also, public procurement would be opened to State-owned enterprises, and equally with private businesses.

Doanh made note of the World Trade Organisation's Bali Agreement and its US$1 trillion trade pact covering customs, agriculture and assistance for the world's impoverished populations and least developed nations, which was reached early this month on December 7.

Doanh said that thanks to the agreement, Viet Nam could increase agriculture exports and put in place customs reforms.

However, he emphasised that Vietnamese enterprises must prepare for tougher competition when joining the global and regional stage, especially in service industries.

Enterprises in Viet Nam were facing many difficulties, including a gloomy real estate market, bad debt caused by ineffective public investment, and ailing State-owned enterprises, he said.

"We identified causes for the ailment of the country's economy, prescribed medicine, including the restructuring of credit institutions and State-owned enterprises," he said, "but the implementation is not strong enough."

Doanh cited a reduction in investment from the private sector, which was at 15 per cent of total social investment from 2007-10, and is now down to 11.5 per cent last year. Also, the credit growth rate reduced from 53.89 per cent in 2007, to 23.38 per cent in 2008, to only 7 per cent last year.

Moreover, he said that he saw few preparations being made among enterprises for expanding the country's market opening, even while Government was speeding up negotiations.

Vice Rector of the Foreign Trade University Dao Thu Giang said that one of the major weakness of Vietnamese enterprises was their poor connections among enterprises operating in the same industry, since they now sought information and were collecting data on markets and integration by themselves and rarely sharing information with each other.

"In regional and global economic integration, domestic enterprises should unite and boost their linkage to create larger strengths," she said.

Further, university lecturer and international trade expert Dao Ngoc Tien said that the world economy, and the nation's domestic economy, were expected to recover next year.

Also, Viet Nam was negotiating economic integration agreements, including a Trans-Pacific Partnership Agreement, Regional Comprehensive Economic Partnership (RCEP), and EU - Viet Nam Free Trade Area (EFTA), which offered opportunities for Vietnamese enterprises.

However, enterprises still knew little about the agreements, which resulted in poor preparations.

"Enterprises should not expect the agreements would bring them all opportunities," he said. — VNS

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