The Government of Viet Nam has consistently pursued a comprehensive integration policy with focus placed on international economic integration, considering this a motivation to promote economic reform, growth and development, Prime Minister Nguyen Xuan Phuc has said.

PM Phuc, who is also head of the National Steering Committee for International Integration, delivered the message at the Viet Nam International Economic Integration Forum 2017 held in Ha Noi on Wednesday.

The PM highlighted Viet Nam’s recent achievements in integration and the role of foreign investment in the country’s economic development. Viet Nam’s trade surplus exceeded US$3 billion for the first time and its import-export turnover in 2017 is likely to reach $420 billion, he said, adding that the nation is now home to more than 24,000 valid foreign-invested projects with total registered capital of nearly $320 billion.

To implement its integration commitments, Viet Nam is making every effort to foster economic reform, from re-organising production, building brands to renewing growth models, and improving the economy’s competitiveness and legal institutions in order to create a better business climate for domestic and foreign investors, Phuc said.

The government leader asked ministries, sectors and localities to strongly and comprehensively implement the international integration action plan in all aspects in parallel with the reform process.

He requested the Inter-sectoral Steering Committee for International Economic Integration to enhance connections and coordinate ministries, sectors and localities to effectively carry out the work of international economic integration and examine international agreements, especially commitments in free trade agreements (FTAs).

The PM also underlined the important role played by businesses, especially private enterprises, saying that the private sector is a driving force behind the national economy.

He called for more efforts from businesses to study FTAs, thus building their own business plans and overcoming challenges. Small- and medium-sized enterprises should foster linkages through associations to protect their legitimate rights in the context of increasing competition, and to deal with new international trade barriers, he added.

Sharing opinions raised by participants at the forum, Phuc stressed that attention should be paid to increasing labour productivity, developing human resources, improving national governance capacity, along with capitalising on internal resources and international integration opportunities and the Fourth Industrial Revolution.

He also took the occasion to call for and praise support and cooperation from international partners and the community for Viet Nam’s economic development.

The PM asked the Inter-sectoral Steering Committee for International Economic Integration to closely coordinate with domestic and foreign research agencies to promote research on strategic issues concerning international economic integration, thus giving advice to the Government in the policymaking process.

In his opening speech, Deputy PM Vuong Dinh Hue, who is also head of the Inter-sectoral Steering Committee for International Economic Integration, said Viet Nam is seeing both opportunities and challenges in the implementation of new-generation FTAs with higher commitments.

Hue pointed out that Vietnamese businesses, of which more than 90 per cent are small- and medium-sized enterprises, have shown their weaknesses in terms of strategic thought, technology and competitiveness when implementing integration commitments.

Challenges ahead

Vu Thanh Tu Anh, research director of Fulbright Economics Teaching Programme said FDI was important. However, considering its contribution to the economy should be more important.

Anh said Viet Nam has participated in a number of economic waves. The importance was that Viet Nam should consider what benefits are gained from this.

“Viet Nam has been a successful country and mostly enjoyed achievements after its international integration as 70 per cent of import-export value comes from foreign firms,” he said.

However, he said risks are ahead as FDI movements depend on the world’s economic and political climate. Moreover, if Viet Nam continues to be a location for foreign companies to produce and export without transferring technologies, it would be unsuccessful in integration.

“Integration is important, but how to integrate is even more important,” he added.

He suggested that the Government should effectively use opportunities from international economic integration by selectively attracting foreign investment with a long-term vision, finding ways to join the global supply network and taking advantage of new generation FTAs to expand export markets.

Nguyen Dinh Cung, director of the Central Institute for Economic Management shared the idea, saying that FDI companies have better taken advantages of integration than Vietnamese firms thank to the economy’s openness and increasing import-export turnover.

Cung suggested that the Government should further promote the cutting of business trading costs in the 2018-20 period. Accordingly, at least one-third or a half of business conditions should be removed while reducing a half of goods under special inspection.

“2018 should be a year of cutting costs for businesses. The Government should consider reducing interest rates. In addition, it is necessary to review BOT fees and resolving traffic jams to lower logistics costs,” he added.

The forum, hosted by the Inter-sectoral Steering Committee for International Economic Integration, comprises three working sessions with the participation of 300 domestic and foreign delegates. — VNS