VietNamNet Bridge – Many people thought that Vietnam would become an economic tiger of the world in the next 15-20 years. then they thought Vietnam would become an Asian tiger. But now they consider Vietnam a hibernated cat. 

VietNamNet would like to introduce opinions of former Deputy Minister of Trade Luong Van Tu, chief negotiator for Vietnam’s admission to the World Trade Organisation (WTO) and Pham Chi Lan, senior economist, about Vietnam’s economy four years after joining the WTO.

Luong Van Tu: Four years after Vietnam entered the WTO, the business environment has changed from closed, through half-open to now highly open and deepely integrated with the world. The legal environment is also better.

Thanks to integration, the thinking of Vietnamese businesses has changed from passive to active mode, focusing on economic effectiveness. Many businesses have expanded their from single area to multi-areas, from family-scale to joint stock ownership, from short-sighted to sustainable mode.

The number of companies increased from 100,000 in 2006 to around 500,000 in 2009. Many outstanding young managers have appeared.

However, many businesses still lack adequate research on the market and its segments. Many businesses don’t do business professionally. There is a shortage of highly qualified managers. The supporting industrues develop slowly due to the shortage of investment. The institutional development does not progress fast enough to adapt the global standards.

Pham Chi Lan: After joining the WTO, Vietnam has followed the common rules and it knows what it benefits from and what it loses from the WTO play-ground.

Previously, many experts said that Vietnam would be the world’s tiger in 15-20 years and then they said Vietnam would be an Asian tiger and now they consider us a hibernated cat.

When joining WTO, many people said that wherever our goods are, our border is there. It is clear that Vietnam is the loser on its home market. According to a survey, up to 95 percent of the goods sold in the southern province of Tra Vinh are Chinese products. If we further integrate into the WTO, where will Vietnamese goods go to? This is a great challenge for the country.

If we don’t have good policies, in the next decade, Vietnamese businesses can’t compete with other rivals.

After entering the WTO, we have pursued a wrong growth model, which focuses on growth in speed and quantity only to be self-assured that Vietnam always ranks second in Asia for growth rate, only behind China. However, Vietnam’s one percent of growth is much smaller than one percent of growth of other countries.

Answering the question, the WTO membership will be the motivation to create changes in rules of the game, especially in institutions and policies in Vietnam. After four years, how has Vietnam changed itself to adapt the world playing rules? Luong Van Tu said:

The effectiveness of integration depends on many factors. The state policies and the capability of enterprises are two important factors. Some countries have become tigers and dragons thanks to good macro-economic policies and the business and production capability of their businesses. Vietnam can’t follow the world’s playing rules because it lacks these factors.

Pham Chi Lan said that Vietnam’s economic renovation is not enough to help the economy to take off. The institutions are the hindrance of growth and deeper integration. We need to have a new renovation strategy, to build a modern institutional system and to improve the law, policies, the government apparatus and personnel.

Vietnam can’t change its position in the region if the gap between the financial policy and the economic policy is not narrowed. State governance must be improved to develop free economic zones, renovate big economic groups and to improve the dialogue mechanism t.

Luong Van Tu: International businesses use law in business-making while Vietnamese businesses attach much importance to business relations.

transparency and legal divisions’ compliance with the world standards is the weak point of Vietnamese businesses and this hinders them from joining the game/competing with international partners.

We are a poor country but we still want to enjoy the favors of the socialist system. While poor countries have to work on Saturdays and Sundays, we are off work onFriday afternoon so how can we become a rich country.

We have to join the global game and we have to improve ourselves. The stronger our businesses are, the easier they can integrate into the world.

Businesses have to change their thinking and not lean on the government’s assistance.

Pham Chi Lan: Vietnamese businesses still pay attention to short-term benefits. Policies change very often. The competitiveness of Vietnamese businesses is low. when they go to the world market The adherence among Vietnamese businesses is weak.

One of the reasons behind this  are  problems in policies and the weakness of business associations. Each business has to review itself, adjust its strategy, focus on the domestic market and improve their competitiveness.

Vietnam has joined the WTO four years ago but many countries still don’t recognize Vietnam as a market economy and they cite a clear evidence that the government favors state-owned enterprises.

Luong Van Tu said that  market economy is like a political game and the standards for recognizing a market economy vary in different countries.

Pham Chi Lan: The WTO doesn’t have criteria to define what makesa market economy but Vietnam needs to pay attention to standards set by the US and the EU.

Some countries say that we don’t have a market economy because of the government’s protection of state-owned enterprises.

The world is not interested in how many state-owned enterprises we have but how we treat them.

The privileges granted to state-owned enterprises harm both the state-owned and private enterprises. Certainly, the private economic sector is at disadvantage compared with the state sector. But prreferential treatment is not good for state-owned enterprises either. The Vietnam Shipbuilding Industry Group (Vinashin) is an obvious example of an easy access to capital and resources.

Sometimes, with so many resources, state-owned enterprises will lose their competitiveness.

Tran Dong