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Where is Vietnam in the globalization process?

Released at: 19:21, 24/05/2017

Where is Vietnam in the globalization process?

Photo: Embassy of France in Vietnam

Mr. Pascal Lamy, formerly the Director General of the WTO, tells VET that Vietnam is the greatest beneficiary of globalization and needs to take advantage of human resources in the years to come to stay abreast of the fourth industrial revolution.

by Quynh Nguyen

How would you evaluate Vietnam’s international economic integration process since it joined the WTO?

Vietnam is the greatest beneficiary of globalization and has been a successful example of integration during its ten years in the WTO. It is already taking advantage of its human resources and benefiting from its comparative advantages in areas where human resources play an important role. Vietnam’s accession into the WTO has been a success and has helped it grow very well compared to countries with high growth rates. In the global economy, we see economic growth in developed countries not being as high as in emerging countries. For example, the US and Japan have growth rates of only 2-3 per cent, and Europe is even lower. I hope that Vietnam will try to maintain this growth.

What about the shortcomings? What are the limitations of Vietnam in international economic integration and how can they be overcome?

In the context of accession to the WTO, Vietnam has initial advantages in achieving average global growth but many challenges still lie ahead, especially in market competition. Moreover, some of the constraints from the equitization of State-owned enterprises have also slowed down the pace of economic integration. Private enterprises are more likely to be more adaptable. There is also the problem of corruption. But what I want to say here is that Vietnam has reached out to the world through reform and opening up, which require a special political process.

I am not pessimistic because I see that Vietnam has the capacity to cope with challenges. It faces difficulties in the process of innovation and reform and will therefore contribute to a successful ASEAN region, making it more dynamic and unified with mechanisms that are likely to enhance competition compared with countries in Latin America.

You said that Vietnam is integrating well, but in fact Vietnamese enterprises are having to overcome trade challenges as some developed countries are imposing protectionist measures in order to limit imports from developing countries like Vietnam. How should Vietnam respond?

This is normal in trade. When opening the door to integration, there will be people who are afraid of disturbance or fear change. Integration is not a smooth process. This is a principle when we open the door to integrate in global trade and is the premise for this process. There are always positive and negative things that make it difficult for some people. The main issue here is how this process is carried out in fair trade conditions.

Free trade is good but fair trade is better. In order for the trade process to achieve efficiency, it is important that countries have an equal mentality. Will Vietnam be competitive and will it compete equally? I believe that there is fair competition, because if not, Vietnam would not have joined the WTO, a model for negotiating fair trade issues with multilateralism.

For countries like Vietnam, it is necessary to prepare for increasingly strict criteria. With economic development, the lives of people in Vietnam will be better but its population will become older, so Vietnamese need high requirements regarding sanitary regulations. This is necessary to improve the quality of products in the country.

What should Vietnam do to integrate more deeply, especially in the context of the fourth industrial revolution?

Vietnam now exceeds the world’s average growth. Advantages for Vietnam lie in its human resources, who possess a hard-working and determined character. This partially explains the effectiveness of the country in global competition.

In the future, Vietnam needs to invest in training and fostering talent. In the era of the fourth industrial revolution, Vietnam still has advantages. Economic exchange activities are fully automated but I think that the best strategy in order to succeed against all risks is to invest in wisdom. Migration and cybersecurity issues will have an important impact on the international integration process and Vietnam will be no exception. In the fourth industrial revolution, Vietnam should further develop its intellectual advantages and not rely on cheap labor.

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