Despite certain progress in recent years, Vietnam’s supporting industries are still weak. In this situation, Prime Minister Nguyen Xuan Phuc requested ministries, localities and businesses to make efforts to develop supporting industry development measures and soon turn Vietnam into a production center of multi-company. nation.
Growing at an annual average rate of 15% for the past 20 years, garment production has emerged as one of Vietnam’s major economic sectors with an expected export of US $ 42 billion by 2020. Wearing Although Vietnam is the fifth largest exporter of apparel in the world, its garment industry is relatively weak, unsustainable and vulnerable, in part due to the uneven development of industries. supporting industries. Specifically, the spinning and sewing segments are growing rapidly, while the fabric manufacturing segments are rather slow, creating a bottleneck in the entire process of the industry.
The heavy reliance on imported fabrics has lost the initiative of garment manufacturers in their business plans, limiting their creativity and making the industry unable to break out of the segment. manufacturing, this is one of the lowest profitable stages in the entire manufacturing process.
According to the Ministry of Industry and Trade (MOIT), although the domestic component production capacity has improved in recent years, the proportion of domestic content is still quite low. That is 40-45% in clothing products and only 7-10% in cars under 9 seats, far behind the target of 40% by 2005 and 60% by 2010. The electronics industry is also dependent. They are also focused on foreign-invested enterprises, because the content of domestic content is only 15% in conventional IT products and 5% in more advanced equipment. However, most of the domestic suppliers come from FDI enterprises because Vietnamese companies can only provide printing and packaging products with very small value.
MOIT Minister Tran Tuan Anh frankly admitted that this situation was due to limited investment and the support of the government, not suitable for their role. Policies to develop supporting industries have been slow and inconsistent. Moreover, many localities have not paid adequate attention to supporting industries, making the incentive policies introduced by the central government not properly implemented. As a result, businesses still have difficulty accessing government policies, resulting in their limited size and capacity.
Currently, only 300 domestic enterprises can participate in the supply chains of multinational companies, compared with 1,800 enterprises producing components and components and 75,000 in the manufacturing sector in Vietnam. Moreover, the production organization capacity and technological level of most domestic enterprises in supporting industries is relatively low. Local businesses can now only meet 10% of demand for products in supporting industries. The fact that most parts and components have to be imported means that the value added of Vietnam’s manufacturing industry is very low compared to other countries in the region. Despite accounting for nearly 90% of the economy Production revenue in 2017, manufacturing contributed only 15% to GDP, compared to 20% in most countries in ASEAN and East Asia.
Need long-term and consistent policy.
According to experts, supporting industries are considered as the foundation for main industries through the supply of parts, components and technical processes. Supporting industries do not play an auxiliary role but play a major role in the national industry. In the era of global economic integration, the national industry cannot develop without strong development of supporting industries because this is a determinant of production costs, and increases in added value and competitiveness of the final product.
Recognizing this, many countries around the world have allocated a lot of resources to strengthen supporting industries to build internal strength and self-reliance. In 1949, Japan introduced laws to promote the activities of subcontractors, or in other words, the activities of supporting industries. In the following years, various laws were enacted and a list of government-prioritized products was launched, all focusing on supporting industries. To date, Japan has millions of industrial manufacturing enterprises, many of which are very small but have been deeply involved in global value chains, even in high-tech industries such as aerospace and aviation.
Malaysia also began adopting preferential policies for pioneering industries in 1958. The Southeast Asian country also endeavors to develop and strengthen industrial connectivity between large enterprises and suppliers. domestic. In addition, Malaysian Malaysian businesses in supporting industries are also supported through effective government programs. Thanks to such policies, supporting industries in Malaysia have been developing strongly, especially in the manufacture of mechanical and electronic parts.
Vietnam has great potential but must seriously invest and innovate
From the above examples, the lesson for Vietnam is that it is necessary to appreciate the role of national economic development support so that consistent, long-term and long-term policies can be put in place and provided with sufficient resources. to quickly improve the capacity of supporting industries through specific programs.
According to the Vice President of Vietnam Association of Supporting Industries, Vietnam needs a separate law with special policies to strengthen supporting industries. Minister Tran Tuan Anh stated that it was time for Vietnam to consider a special policy to promote supporting industries.
Because most Vietnamese industrial enterprises are small and medium or even micro, they need long-term and consistent government support, in addition to their own efforts. The government must stand side by side and accompany them to help them improve their capacity.
Vietnam Trade Union Director Nguyen Van Hoa said that capital and access to land will be the most significant support for businesses. Foreign investors can secure very cheap loans but Vietnamese businesses have to borrow at a much higher interest rate, making it very difficult for them to increase and occupy a part of the global value chain. The government should take action so that businesses can access preferential long-term loans, for example 6-7%, so that they have motivation to improve production levels and competitiveness.
In the context of deeper and deeper economic integration and growing international competition, the weaknesses of Vietnam’s economy are being exposed. The problem of restructuring the economy and choosing new growth models will become more urgent if Vietnam wants to grow sustainably and close the gap with other countries in the region. In the process of restructuring, the role of industrial production and supporting industries was identified as the most important pillars.
However, development of supporting industries takes a long time to accumulate management expertise and production skills and a leap cannot be made overnight without the strong support of major covered. The government needs to implement a consistent and long-term policy and allocate sufficient resources to help manufacturing businesses reach regional and international levels.
Market development policies such as promoting the development of downstream industries and materials are also needed. In addition to financial support, technology development and human resources, it is necessary to promote linkages between Vietnamese enterprises and foreign manufacturing companies.
For domestic enterprises themselves, they can not only rely on government support but must actively innovate technology, improve management and production capacity to gradually gain a foothold in the competitive market. increasingly fierce. These are the basic measures to ensure the stable development of supporting industries, which will lay the foundation for the national economy to develop more sustainably in the long term.
According to the People’s Newspaper