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Vietnam Today

Vietnam still behind in global value chain

Released at: 15:40, 07/09/2017

Vietnam still behind in global value chain

Photo: Quynh Nguyen (VET)

September 7 conference hears of measures to boost Vietnam's presence in global value chain.

by Ngoc Chi

Only some 300 Vietnamese enterprises are qualified to participate in the global supply chain but most of these only provide spare parts and have not been involved in main production, those attending the “Vietnam at a Crossroads: Engaging in the next Generation of Global Value Chains Report” conference held by the World Bank and the Ministry of Industry and Trade (MoIT) on September 7 heard.

The conference also focused on improving competitiveness and strengthening links between small and medium-sized enterprises (SMEs) and foreign-invested enterprises (FIEs).  

“Vietnam has successfully integrated into the global value chain, thereby creating jobs that promote economic growth and reduce poverty,” Mr. Ousmane Dione, World Bank Country Director for Vietnam, told the gathering. He also emphasized that engaging in higher value-added activities and connecting domestic enterprises with foreign investors and international markets could help move Vietnam to a higher level in the global value chain.

Other experts, however, suggested that Vietnam is still at the lower end of the global value chain. The reason is that the country only performs steps that bring the lowest value added, and most Vietnamese enterprises only participate in the lowest stages in the supply chain, such as assembly and processing.

World Bank experts also pointed out that Vietnam can choose to move towards diversification and should support the development of innovative domestic firms that have the potential to create inventive products.  

Mechanisms and policies to strengthen capacity and technology among domestic enterprises would also create the conditions for linking with FIEs and reaching out into international markets. It is necessary to narrow the gap in infrastructure by promoting the mobilization of private sector capital.

Vietnam also needs to develop competitive services markets and liberalize its regulations on foreign direct investment. Border procedures also need improvement, to bolster transparency and predictability. Boosting relations with developed countries to ensure strong demand and investment in technology would also result in a higher position in the global value chain.

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