Tuesday, 19 Dec 2017

Vietnamese enterprises to aim for higher global value chain integration

Updated at Thursday, 07 Dec 2017, 12:24
The Hanoitimes - Due to weak linkages between domestic enterprises, foreign markets and investors, the level of Vietnamese enterprises’ integration in global value chain remains modest. However, more chances will come as Vietnam has become the world’s spotlight in attracting FDI.
At present, there are over 110 million of micro, small and medium enterprises (MSMEs) in APEC member economies. MSMEs has significantly contributed not only in Vietnam but also in the APEC region, amounting to 79% of total enterprises and creating 65% jobs, 30 – 40% export value in APEC region. 
Vietnamese MSMEs can gain more from the global value chain.
Vietnamese MSMEs can gain more from the global value chain.
However, according to statistics at APEC dialogue on enhancing capacities of MSMEs in exporting services held in Vietnam recently, there are approx. 21% of MSMEs in Vietnam taking part in the global value chain. As such, Vietnamese MSMEs could not gain benefits from the FDI sector through technologies and knowledge transfer, or boosting productivity. 

Experts said, reasons for the above issue is that MSMEs in Vietnam have limited financial capabilities, low technologies and inadequate human resources. Accessing capital & finance funding and investors have not up to standard due to the lack of financial resources to take part in the global value chain; lack of high skilled human resources and the linkages between enterprises. With the inefficient linkages between domestic enterprises, foreign markets and investors, the production process of Vietnamese enterprises often does not connect to the value chain. 

According to the Director of the Multilateral Trade Policy Department under the Ministry of Industry & Trade Luong Hoang Thai, recently, Vietnam has organized multiple events to support small and medium enterprises (SMEs). In particularly, this issue had also been mentioned in the APEC Economic Leaders’ Week 2017. Along with this, the program to facilitate SMEs development has been a priority for 2017. 

However, Thai said there have not many specific programs to support SMEs, especially in exporting services. While there are very few enterprises aware of their advantages in domestic and international markets. 

The Chairman of APEC SME Committee for Export and Services Sergio Arzeni said that economic growth in the region is now very positive and will be higher in the following years. As such, it is necessary to create favorable conditions for MSMEs to take part in the global value chain, including the exporting services. He expected Vietnam’s economic growth will reach about 6.3% next year. However, aiming to meet the expectation, it is highly dependent on policymakers, and companies need to seize and exploit opportunities, he added.

Sharing the same view, the Vice Director of Vietnam Chamber of Commerce & Industry (VCCI) Nguyen Thi Hanh said, advantages in APEC which Vietnamese MSMEs can utilize are to focus on exporting products such as textile & garment, electronics products, fisheries, footwear. On the other hand, due to the effect of FTAs, Vietnam have preferential treatments in tariffs, so there should be clear chances for Vietnam to take part in the value chain of these sectors.

Besides, opportunities to facilitate exporting services are transportation, e-commerce, healthcare, tourism, logistics, the free movement of high skilled labor forces in APEC member economies. Representative of VCCI said in the context of Vietnam being the spotlight in attracting FDI, the participation of Vietnam in numerous FTAs and commitment to improve investment environment and intellectual protection rights will be the main motivation for international investors. With this being said, MSMEs in Vietnam will have chances to take part in the global value chain when leading corporations coming to Vietnam. 
Ngoc Thuy
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