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Manufacturing productivity and competitiveness need attention

Released at: 15:49, 26/04/2019

Manufacturing productivity and competitiveness need attention

Photo: Nghi Do

New report notes key findings in the productivity and competitiveness of Vietnam's manufacturing industry.

by Nghi Do

Productivity in Vietnam’s economy is still low, innovation and creativity are still not high, and Vietnamese enterprises haven’t created comparative advantages, according to the latest joint report from the Ministry of Planning and Investment (MPI), the Vietnam Academy of Social Sciences (VASS), and the UN Development Programme (UNDP).

These are among the key findings in the Productivity and Competitiveness of Vietnam’s Enterprises Report - Volume 1: Manufacturing, which was released on April 26 in Hanoi by MPI, VASS, and UNDP.

Vietnam’s industrial competitive index, manufacturing exports, and RCA (Revealed Comparative Advantage) have continuously improved compared to other regional countries. In some indicators (such as value-added-to-output ratio and RCA), Vietnam outperformed India and Bangladesh. In other manufacturing performance indicators, especially labor productivity, the country lagged behind comparative countries with gaps still remaining large between the country and middle-income countries in the region (China, Indonesia and Malaysia) and very large to industrialized countries (Japan and South Korea).

Vietnam’s manufacturing labor productivity remained around one-quarter of China and Malaysia’s, one-third of Indonesia and Philippines’, half of India and Thailand’s, and around 7 per cent of Japan and South Korea’s.

“The report is considered one of the important information inputs for the process of building the Socio-Economic Development Strategy (2021-2030) and the Socio-Economic Development Plan (2021-2025),” said the Deputy Minister of Planning and Investment.

The report recommends Vietnam prioritize the enhancement of domestic private enterprises’ productivity and competitiveness during its next development stage and integral parts of public investment, State-owned enterprise reform, and FDI policies. This report also makes several specific recommendations to elevate the productivity and competitiveness of different sub-sectors tailored to their specific characteristics and past performances.

Dr. Dang Nguyen Anh, Deputy Chairman of VASS, said Vietnam needs to transform its growth model towards dependence on productivity increases, innovation and creativity, and the competitive capacity of enterprises.

Ms. Caitlin Wiesen, UNDP representative in Vietnam, underlined that the government needs facility piloting and application on the new model for the private sector in order to address bottlenecks in each sub-sector and adopt concrete actions to support the transformation process.

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