Enterprises participating in the midterm Vietnam Business Forum, held in Hanoi today, July 4, urged the Government to remove obstacles to their operations and help them take full advantage of opportunities ushered in by free trade agreements (FTAs).

Representatives of ministries, agencies and enterprises at the midterm Vietnam Business Forum held in Hanoi on July 4 - PHOTO: VGP

At the forum, titled “Linkages between domestic and FDI businesses towards common goals,” Minister of Planning and Investment Nguyen Chi Dung stressed that enterprises were the driving force of Vietnam’s economic development.

Last year, the country’s gross domestic product (GDP) reached US$220 billion, an eight-fold increase against 1997. The figure is expected to hit some US$300 billion by 2020.

Foreign direct investment (FDI) enterprises have contributed handsomely to such achievements, Dung added.

Enterprises from 128 countries worldwide have invested in some 26,000 projects in Vietnam so far, with a total registered capital of US$326 billion, of which more than US$180 billion has been injected into projects.

The FDI sector makes up a quarter of the total investment and one-fifth of the country’s GDP. More than half of the FDI capital has been channeled into the manufacturing and processing sector, generating half of the country’s industrial manufacturing revenue, contributing 72.6% of the total export turnover and creating jobs for 3.6 million workers, the minister noted.

FDI firms have also helped sectors access advanced technology and international standards in corporate governance.

Kim Heung Soo, chairman of the Korean Chamber of Commerce in Vietnam, pointed out that Korean firms have helped Vietnam develop supporting industries and small and medium enterprises. For instance, Samsung has helped its Vietnamese partners increase their capacity by 85% by providing consulting services.

Minister Dung also admitted loose links between FDI and domestic enterprises, insignificant participation of local firms in global value chains, underdeveloped supporting industries and modest technology transfers.

He proposed FDI companies create opportunities for Vietnamese firms to join their value chains. Meanwhile, he stressed that local firms must update their management methods, adopt advanced technology and improve their products’ quality and competitiveness.

At the forum, Vu Tien Loc, president of the Vietnam Chamber of Commerce and Industry, highlighted the challenges for domestic and FDI enterprises in the days ahead.

He believed that a possible trade war among large economies would have a major impact on the global economy, and on Vietnam’s economy, in particular.

Meanwhile, although the country’s export revenue has not gone down, the export growth rate has slowed monthly. Vietnamese exports, especially seafood, have faced obstacles in large markets, such as the United States and the European Union.

Moreover, not all ministries, agencies and localities have seriously fulfilled the Government’s requirement of administrative procedural reforms.

Since the one-door policy was issued four years ago, only 19% of customs clearance procedures have been conducted online, and such stagnance has hindered the operations of enterprises.

Ministries and agencies have applied practical measures to simplify specialized inspections in the import-export sector. However, after three years, products exempted from specialized inspections account for a mere 6% of the total.

Moreover, the average time for each specialized inspection in the country is 76 hours, three times higher than that in Indonesia, Malaysia, the Philippines and Thailand, Loc noted.

The Government had also asked ministries and agencies to halve business conditions by October. However, only the Ministries of Industry and Trade, Agriculture and Rural Development, Construction, Finance and Health have seriously implemented the requirement.

Enterprises do not know if other ministries are preparing plans to simplify business conditions or whether these plans are appropriate, Loc added.

He proposed the Government continue reforming the legal system and improving the investment environment while making the most of the benefits under free trade agreements (FTA), including the forthcoming Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

In addition, Vietnam should take advantage of opportunities from FTAs to support local exporters in the context of complicated developments arising from uncertainties in global trade.

Vietnamese businesses had urged the Government to swiftly ratify the CPTPP and submit it to the National Assembly at its meeting late last year as well as sign the EU-Vietnam FTA.

Vietnam has numerous opportunities to bolster exports, thanks to FTAs, but the country is facing increasing trade deficits with its FTA partners, proving that Vietnam has yet to take full advantage of FTAs with its partners, Loc concluded.

At a press conference in Hanoi a day ahead of the forum, Vu Tien Loc, president of the Vietnam Chamber of Commerce and Industry, said that Samsung was planning to cut deals with 200 foreign suppliers to support its manufacturing in Vietnam, indicating that Vietnamese firms had yet to become involved in global production chains, the Government news website reported.

Tomaso Andreatta, vice chairman of the European Chamber of Commerce in Vietnam, told the local media that most of the Vietnamese enterprises operating on a small scale should improve their management and further their cooperation with foreign firms. In addition, the workforce should be equipped with necessary knowledge and skills.

Andreatta was quoted by news website VnEconomy as saying that Vietnam’s economy was developing at a fast pace, thanks to the growth in exports and substantial foreign investments. However, the real estate bubble may burst this year, affecting the banking system and the economy as a whole.

Regarding the large volume of capital poured into property projects, Andreatta noted that property loans were risky, so enterprises should invest in other sectors, such as services.

SGT