VietNamNet Bridge – The Government is considering allocating VND1.72 trillion (US$76.85 million) for a scheme to boost the development of supporting industries in the 2016-2025 period.

The State budget is expected to provide VND1.485 trillion of the total funding and the rest will be sourced from other sources.

The Ministry of Industry and Trade will be tasked with implementing the scheme while the ministries of finance and planning-investment will cooperate in capital disbursements.

The scheme comprises six programs. The first program worth VND300 billion aims to finance enterprises to embrace international governance practices. As many as 2,000 enterprises are expected to benefit from this program.

With the second program worth VND115 billion, enterprises in supporting industries will be aided to become suppliers of multinationals. Around 1,000 Vietnamese firms will take part in the program and 300 other enterprises will become direct suppliers of producers of finished products.

The four remaining programs are worth VND115 billion, VND220 billion, VND890 billion and VND80 billion respectively. They will help promote investments and sales; develop human resources; fund research and development activities and application of technologies; and build and update database of a portal specializing in supporting industries.

According to the Vietnam Chamber of Commerce and Industry (VCCI), 36% of Vietnamese enterprises have joined the global value chain, well below 60% in Malaysia and Thailand.

Only 21% of small and medium enterprises (SMEs) in Vietnam have joined the global value chain while the ratio in Thailand is 30% and 46% in Malaysia. Therefore, domestic SMEs have not benefited from foreign direct investments in terms of technology and know-how transfer, and productivity enhancement.

SMEs make up only 16.8% of the country’s total exports.

SGT