The secret to Vietnam’s success is quality, not quantity
VietNamNet Bridge – Now that Vietnam’s economy has turned the corner and is on the mend, Vietnamese enterprises need to shift their focus to developing a top-notch Made-in-Vietnam brand with a reputation for quality.
Central Institute for Economic Management (CIEM) Director Nguyen Dinh Cung made the statement at a recent seminar in reference to Vietnam’s economic prospects for 2015 and beyond.
Giving priority to growth quality
Obviously, Vietnam has turned the corner and the economy is on the road to recovery Cung said, but their remains much to do to achieve economic sustainability over the long term and make the transition to a modern industrialised nation by 2020.
CIEM’s latest report indicated that to stay on course to solid economic growth, Vietnam should also concentrate on increasing labour productivity by one and a half fold in the near term.
Specifically he said Vietnam’s labour productivity has not kept pace with neighbouring countries in the Southeast Asian region and in particular – China.
The CIEM director also underscored the need to keep inflation constrained, which he considered the key factor to ensuring economic stability adding that it is likely Vietnam will be able to achieve its set target for economic growth in 2015 without higher inflation.
In the context that inflation is kept in check at a low level, some economists have suggested loosening fiscal and monetary policy to accelerate credit growth and foster economic growth.
However, according to CIEM Director Cung, this is not an appropriate move at this juncture.
CIEM Director Le Xuan Ba in turn shared Cung’s view and said it is more important to control inflation and pay special attention to increasing the quality of Vietnam’s goods and services as well as achieve satisfactory growth than to loosen fiscal and monetary policy.
Regarding economic prospects for 2015, Cung predicted Vietnam’s economic growth to reach 6.07%, lower than the set target (6.2%) but still respectable, while export growth is likely to hit 11.2%, lower than last year’s figure, but still enviable.
He forecast the trade deficit to hover around US$3.9 billion on the back of a decline of oil revenues. Meanwhile, he said inflation will most likely hit a modest 4.14%.
Maintaining market order
CIEM experts at the seminar placed a great deal of emphasis on formulating market order and setting up market rules to achieve stable macro-economic growth and consolidate the trust of foreign investors.
In 2015 and 2016, priority should be given to upgrading and installing modernised infrastructure and reforming economic institutions towards developing the market economy.
Greater effort should be placed in improving the business climate, simplifying administrative procedures, reducing production costs and raising productivity in a more sustainable manner, they emphasised.
Last year, the major focus was placed on institutional reform, thus opening up more opportunities for investors and ensuring legitimate rights of enterprises. As a result, many barriers were removed, which are more conducive to the desires of businesses.
For his part, leading economist Le Dang Doanh said that when a customer makes a decision to purchase one particular brand over another, it is most heavily influenced by the company’s reputation than by any particular feature of the product or service.
There is a strong correlation between a company’s reputation and a consumers’ willingness to purchase the product or recommend it to a friend. The – Vietnamese people prioritize using Vietnamese goods campaign – is a case on point.
The overriding goal of the campaign has been for Vietnamese businesses to gain the trust of customers around the globe by paying meticulous attention to the quality of goods and services.
A recent survey by the Steering Committee for the campaign in HCM City confirms that the campaign is bearing out. Over 96% of people surveyed said they viewed the campaign favourably and have gained confidence in the overall quality of Vietnamese products.
Roughly 62.8% reported they have advised friends and relatives to purchase Vietnamese goods. While, 28.15% of those surveyed said they are opting more often to purchase Vietnamese goods over foreign products and services.
According to the results of the survey, over the past five years, the rate of using domestic goods by Vietnamese families has increased from 50% to 85.8%. Around 52.5% of those surveyed purchased at least 80% of all consumer goods locally.