The Vietnamese Government is naturally keen on and has made efforts to grasp opportunities from this trend, such as promoting the development of industrial infrastructure, reviewing the transport and seaport systems, considering high-quality human resources to meet demand and developing supporting industries.

However, these efforts are not enough.

Vietnam seems to “foster” a strategic production potential to promote national competitiveness, which is the supply factor of the economy.

However, there is another factor which policymakers have seemingly yet to pay due attention to and has been little mentioned in discussions, that is the consolidation and development of the domestic market along with building consumer confidence.

According to Michael E. Potter, an economist deemed as among the thinkers of the contemporary world, domestic demand is one of the four main constituents of national competitiveness alongside the role of the Government.

Therefore, this important factor is definitely not to be ignored in building competition strategies or promoting economic renovation in the future.

Vietnam has an export—led economy with a very high degree of openness and heavy reliance on the health of export markets as well as the global economy. The dual crisis this year reveals clearly the negative consequences of an export led economy without due attention to domestic market development and the building and protection of consumer confidence.

Agro-products are always considered the pillar for the economy in times of crisis as they are essentially associated with the everyday demand of consumers.

So why do authorities not promote a similar advantage for other products? Experience of Asian economic stars, especially Japan, shows that the domestic market is a solid support for the economy in normal times as well as in crisis, and from this launch pad, the economy has reached out to the world.

Realities of the global economic integration process indicate that the Vietnamese Government seems not to attach proper importance to the domestic market and domestic consumers in State management as well as support policies.

The closeness and the social and cultural factors make domestic consumption and demand of the domestic market an advantage of national competitiveness.

While other countries see Vietnam and Vietnamese consumers as a potential market to explore, why do Vietnamese enterprises and the Vietnamese Government not have an apparent move to promote, protect and strengthen the domestic market, when the enterprises themselves, in principle, have an advantage for exploration?

That said, Vietnam must build the domestic market as a solid foundation if the country expects its enterprises and its economy to advance further and farther amid the volatile, unpredictable global economy.

Consumer confidence the best shield

Consumer confidence is generally one of the decisive factors of the consumption market. Realities show that the confidence has worsened in recent years when multiple violations of food safety and product quality have eroded the confidence and patience of domestic consumers.

The appeal for the population to prioritize Vietnamese goods can hardly succeed if it hinges only on patriotism. The Government and enterprises should have clear commitments for product quality, consumer protection, and domestic market consolidation and development.

With the rising income and the growing middle class, Vietnam will have demand of scale, in addition to strict requirements for quality and protection from the State.

The Vietnamese consumers’ loss of confidence in domestic goods and preference for foreign goods are something understandable.

In the next phase of economic renovation, the State and enterprises must make a review, build confidence, implement sustainable development, and consolidate and develop the domestic market in line with Vietnam’s international commitments.

The deeper the integration into the regional and the global economy, the more restriction of State intervention in the market as per international commitments.

However, Vietnam must start as soon as possible to build a strong domestic market and a solid confidence in what are produced in the country.

Procrastination may expose the country more to the troubles brought about by its very commitments to opening the economy. 

Take for example, other countries, typically the United States, have complained it’s hard for their cars or consumer goods to penetrate the Japanese market, because in essence, the Japanese Government and Japanese people have built an unshakable confidence for Japanese goods.

In view of international economic integration, the domestic confidence and consumer trend is a natural, legal and sustainable shield against more and more stringent commitments to market opening in the future.

It is a legal shield because consumer confidence and market demand are a factor and a trend not “clearly” subject to government interference. No international commercial laws can accuse the Government for the “natural” features of the domestic market.

Duong Van Hoc

Lecturer at Can Tho University. Fellow student at Yokohama University, Japan

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