Vietnam needs to use resources more effectively

Vietnam’s resources are scarce and are not being used efficiently, experts say.

Addressing the mobilization and use of resources in economic reform in Vietnam, Nguyen Dinh Cung, former head of the Central Institute of Economic Management (CIEM), said if Vietnam can use resources effectively, it would be able to gain GDP growth rates of 9-10 percent per annum, the rates that Japan and South Korea gained in their economic take-off period.

Vietnam needs to use resources more effectively



Bui Trinh, a respected economist, said the current policies are unreasonable.

The import/export policy, which aims to help domestic production, supports foreign invested enterprises (FIEs) because Vietnam is mainly an outsourcing economy.

In the last 10 years, exports led the production increase by 12 percent, but its effect on added value in GDP decreased. The concern is that imports have increased sharply by 52 percent.

The trade deficit reached its peak in 2008 with $18 billion. Imports for FIEs are mostly machines, equipment and materials, while exports are mostly outsourced products with low added value.

In 2000-2015, FIEs enjoyed a trade surplus, while the domestic sector witnessed z trade deficit. FIEs’ export proportion increased rapidly from 57 percent to 67 percent, but its contribution to the added value in GDP has only risen by 3 percent over the last 10 years.

In 2000-2015, FIEs enjoyed a trade surplus, while the domestic sector witnessed z trade deficit. FIEs’ export proportion increased rapidly from 57 percent to 67 percent, but its contribution to the added value in GDP has only risen by 3 percent over the last 10 years.

 


The policy on attracting FDI is considered unreasonable. FIEs now enjoy more investment incentives than Vietnamese firms.

According to GSO, in 2011-2016, FIEs had higher pre-tax profit than the non-state economic sector by 181 percent. Meanwhile, the tax amounts paid by FIEs were just equal to 81 percent of non-state economic sector.

Taxes include direct and indirect taxes. Indirect tax, by nature, is not the tax paid by FIEs to the state budget, but paid by Vietnamese when consuming the products of FIEs. The tax which doesn’t include indirect tax paid by FIEs is just equal to 51 percent of the non-state sector.

The use of the other two major resources – capital and labor – is also ineffective.

Vietnam’s productivity is just higher than Laos and is very low compared with other regional countries. The capital is borrowed for spending and investment, but the investments cannot bring high efficiency.

The state-owned economic sector receives many incentives, but they take losses. Many of them have negative stockholder equity, while thousands of hectares of land allocated to the enterprises have been used ineffectively.

Mai Lan

New FTAs put pressure on VN to reform business practices

New FTAs put pressure on VN to reform business practices

New-generation Free Trade Agreements (FTAs) are expected to help Viet Nam become more competitive if the country reduces trading costs and improves its business environment, experts said on Tuesday at a conference in HCM City.  

Vietnam calls for stronger global governance reform

Vietnam calls for stronger global governance reform

Vietnamese Deputy Minister of Foreign Affairs Bui Thanh Son has called on countries to speed up global governance reform, firstly multilateral institutions, in order to effectively deal with global issues.

 
 

Other News

.
Petrol prices see sharp fall of up to 4,252 VND per litre
Petrol prices see sharp fall of up to 4,252 VND per litre
BUSINESSicon  29/03/2020 

The retail prices of petrol plummeted from 3pm of March 29, making it the sixth consecutive reduction since the beginning of this year.

COVID-19: Bamboo Airways restricts domestic, charter flights
COVID-19: Bamboo Airways restricts domestic, charter flights
BUSINESSicon  29/03/2020 

Bamboo Airways, Vietnam’s newest airline, has announced it will reduce the frequency of domestic flights amid the critical time of COVID-19 fight as directed by the Government and Ministry of Transport.

HCM City property developers offer more products
HCM City property developers offer more products
BUSINESSicon  29/03/2020 

The HCM City real estate market provides more housing projects and subsidises rentals to boost the market amid the COVID-19 pandemic.

Mekong Delta rice farmers earn high income from rice straw
Mekong Delta rice farmers earn high income from rice straw
BUSINESSicon  29/03/2020 

Rice farmers in the Mekong Delta are earning higher incomes from selling rice straw left over from the harvested 2019 – 20 winter-spring rice crop.

Ministry proposes 843 million USD bailout package for businesses during COVID-19
Ministry proposes 843 million USD bailout package for businesses during COVID-19
BUSINESSicon  29/03/2020 

The Ministry of Labour, Invalid and Social Affairs has proposed the Government issue a 20 trillion VND (843 million USD) bailout package to soften the economic impact of the COVID-19 pandemic.

No end to woes of local textile and garment industry
No end to woes of local textile and garment industry
BUSINESSicon  28/03/2020 

While the supply of raw materials from China is recovering after a month of suspension, textile and garment businesses find that they have moved out of the frying pan into the fire as the COVID-19 pandemic

Vietnam's first-quarter GDP growth hits decade low
Vietnam's first-quarter GDP growth hits decade low
BUSINESSicon  28/03/2020 

Vietnam’s gross domestic product (GDP) in the first quarter of 2020 grew 3.82 percent, the lowest pace during the 2011-2020 period, head of the General Statistics Office Nguyen Bich Lam said on March 27.

Potential of eco property during COVID-19  ​
Potential of eco property during COVID-19 ​
BUSINESSicon  28/03/2020 

Ecological real estate is considered a safe investment channel amid the pandemic, meeting the demand for green living space and ensuring health safety for dwellers.

Vietnam enjoys trade surplus of $2.8 billion in first quarter
Vietnam enjoys trade surplus of $2.8 billion in first quarter
BUSINESSicon  28/03/2020 

Vietnam ran a trade surplus of $2.8 billion in the first quarter of this year, higher than 1.5 billion USD recorded in the same period last year, despite the growing COVID-19 pandemic in the country’s major export markets.

Automakers propose Gov’t cut VAT and registration fee for customers
Automakers propose Gov’t cut VAT and registration fee for customers
BUSINESSicon  28/03/2020 

Vietnam Automobile Manufacturers’ Association (VAMA) has proposed the Government reduce value-added tax (VAT) and registration fees for car customers by 50 percent, reports VietNamNet.

Vietnam gains higher exports to Canada, Mexico partly due to CPTPP
Vietnam gains higher exports to Canada, Mexico partly due to CPTPP
BUSINESSicon  28/03/2020 

Vietnam has taken full advantage of the CPTPP to gain strong growth in exports to Canada and Mexico, according to the Ministry of Industry and Trade (MoIT).

Covid-19 wipes out $44 billion from Vietnam’s stock market
Covid-19 wipes out $44 billion from Vietnam’s stock market
BUSINESSicon  30/03/2020 

As the covid-19 epidemic has been escalating, the market capitalization value has been sliding. Market losses have reached $44 billion.

Pandemic has no impact on plastic firm
Pandemic has no impact on plastic firm
BUSINESSicon  27/03/2020 

The global spread of COVID-19 has had an insignificant impact on An Phat Bioplastics JSC’s performance in the first three months, shareholders were told on March 25.

Payment deadline extension proposed for over $3 bln in taxes
Payment deadline extension proposed for over $3 bln in taxes
BUSINESSicon  27/03/2020 

The Ministry of Finance has proposed the payment deadlines for $3.4 billion in taxes be extended to support enterprises, business households and individuals doing business that are directly affected by COVID-19 pandemic.

National food reserves always sufficient for emergencies: authority
National food reserves always sufficient for emergencies: authority
BUSINESSicon  27/03/2020 

National food reserves are enough to cater for emergency situations, the General Department of State Reserves (GDSR) said on March 26.

Rapid growth forecast for solar rooftop energy industry
Rapid growth forecast for solar rooftop energy industry
BUSINESSicon  27/03/2020 

Technological advances, preferential credit policies and pricing incentives have set the stage for solar rooftop energy to become the next big thing in clean energy in Vietnam, according to industry insiders.

Exporters advised to stay ready for orders from Europe
Exporters advised to stay ready for orders from Europe
BUSINESSicon  27/03/2020 

Vietnamese exporters have been advised to make preparations so as to stay ready for orders from Europe when the EU-Vietnam Free Trade Agreement (EVFTA) takes effect and the COVID-19 pandemic is stamped out.

COVID-19 shows pressing need for quicker digital transformation
COVID-19 shows pressing need for quicker digital transformation
BUSINESSicon  27/03/2020 

Minister of Information and Communications Nguyen Manh Hung has urged digital companies to develop platforms for online services as COVID-19 pandemic has sparked a pressing need for Vietnam to hasten digital transformation.

RoK banks expand presence in Southeast Asia
RoK banks expand presence in Southeast Asia
BUSINESSicon  27/03/2020 

Banks of the Republic of Korea (RoK) have strengthened their foothold in Southeast Asia by opening more branches in the rapidly-growing market, the Financial Supervisory Service (FSS) said.

Online sales rise sharply amid pandemic
Online sales rise sharply amid pandemic
BUSINESSicon  27/03/2020 

As Vietnamese are now favoring ‘contactless purchases’ in Covid-19, online sales have increased rapidly.

 
 
 
Leave your comment on an article

OR QUICK LOGIN