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PM lists shortcomings of local economy
The Saigon Times Daily
Friday,  Sep 14, 2018,19:14 (GMT+7)

PM lists shortcomings of local economy

The Saigon Times Daily

Prime Minister Nguyen Xuan Phuc speaks at the opening ceremony of the Vietnam Business Summit 2018 - PHOTO: VGP

HCMC - Speaking at the opening ceremony of the Vietnam Business Summit 2018 (VBS) in Hanoi on September 13, Prime Minister Nguyen Xuan Phuc pointed out the shortcomings of the local economy, reported Nguoi Lao Dong newspaper.

PM Phuc said only 21% of Vietnamese small and medium enterprises have joined global value chains, while the rate in the rest of the ASEAN region is 46%. The proportion of Vietnamese products in these supply chains does not correspond with their potential.

Vietnamese enterprises have only joined these chains in simple phases, such as assembly or product packaging, which have low added value and lack sustainability.

At present, products of domestic manufacturers make up less than 27% of the total input materials of foreign direct investment (FDI) firms. The remainder is purchased from other FDI firms or imported from other countries, PM Phuc added.

Vietnam aims to gain a higher position in global value chains and to strengthen the connectivity between domestic and FDI enterprises, said PM Phuc, emphasizing that the Government has pledged to assist these enterprises.

The PM also called on FDI enterprises to create more opportunities for local firms to join value chains, enhance technology transfer and provide training courses for Vietnamese workers.

Despite the uncertainty in the global economy, Vietnam’s economy is still maintaining its growth. The country’s gross domestic product growth reached 6.81% last year and 7.08% in the first half of this year, the highest growth rate since 2008.

In addition, Vietnam ranked 55th out of 137 countries in the World Economic Forum's Global Competitiveness Report last year, 68th out of 190 countries in the World Bank's Doing Business Report and 45th among 127 countries in the World Intellectual Property Organization’s innovative index.

Vietnam has become an ideal destination for multinational corporations. The country currently hosts more than 26,000 FDI firms from 130 countries and territories.

Meanwhile, domestic private enterprises have reported significant growth, proving Vietnam has a healthy business environment for large firms. Many Vietnamese enterprises are members of the World Economic Forum, such as Viettel, FPT, Vingroup, Vietcombank and Hoa Phat; have created many jobs for the local people; and have contributed significantly to the State budget.

Moreover, Vietnam’s macroeconomy is stable, while inflation is being kept under control.

The country also has an advantage in its workforce, with low labor costs. More than half of the Vietnamese people can access the internet, and 60% of local laborers are under 35 years old.

By actively integrating with the global economy, Vietnam is now a member of the World Trade Organization and has signed 12 free trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the EU-Vietnam Free Trade Agreement.

When investing in Vietnam, investors can approach most of the major markets in the world. In the ASEAN region, Vietnam plays the significant role of a gateway, the prime minister said.

The country has managed trade relations with over 200 countries and territories worldwide with over 20 major export products. It has also taken the lead in exporting farm produce, such as rice, pepper, cashew nuts, basa fish and shrimp. However, investment in the agriculture sector remains modest.

PM Phuc called on enterprises to boost innovation to improve their business performance, stressing that the success of enterprises operating in Vietnam will contribute to the country’s development.

VBS, themed, “Vietnam – Reliable business partner: Connectivity and Creativity,” fell within the framework of the World Economic Forum on ASEAN 2018, which was attended by 1,200 representatives of global corporations.

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