Oct 6, 2012

Vietnam - Selling rice to buy iPhone, Vietnam nurtures hi-tech dream

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VietNamNet Bridge – The farm produce exports in big quantities have put Vietnam on a respectable position on the world’s economy map. However, the title of the king in farm produce export still cannot help Vietnam fulfill its dream of developing high technologies to serve the modernization.

Figures can talk

Vietnamese people believe that the fame of the world’s big farm produce exporter would help it stand firmly in the global economic crisis. They believe that the economic difficulties would force people to fasten their belt and they would only spend money on the most essential goods – the main export items of Vietnam.

Therefore, the statement by Apple about the sale of 5 million iPhone 5s just within three days of launching iPhone 5 into the market was incredible to many people.

An iPhone 5 is now sold at 25 million dong in Vietnam, or 1100 dollars. This means that the five million iPhones sold would be valued 5 billion dollars.

Meanwhile, Vietnam only earned 9.7 billion dollars’ worth of export turnover in September 2012, and earned 83.789 billion dollars in the first nine months of the year.

As such, the sales of iPhone 5s within just three days are equal to 50 percent of Vietnam’s total export turnover in September 2012.

If compared the iPhone 5 sales with the turnover of the 18 export items with the turnover higher than one billion dollars, one would see that the iPhone 5 sales would be only lower than garment exports (11.25 billion dollars), crude oil (6.34 billion dollars), while equal to electronics (5.36 billion dollars). Especially, the sales of iPhone 5 are much higher than seafood export turnover (4.14 billion dollars) and wooden furniture (3.39 billion dollars).

Vietnam, the second biggest rice exporter in the world, got 2.87 billion dollars from rice exports in the first nine months of the year, or just equal to 50 percent of the sales of iPhone 5 just within three days.

The report by the National Assembly’s Economics Committee named “From macroeconomic instability to the restructuring process” has pointed out that the competitive edges built up on the ownership of natural resources and cheap labor force, labor intensive and low-technology content industries are facing the unsustainable development. Only high technology content and labor skills, good infrastructure and management capability can decide the competitive capacity of a nation.

The value of creation

The report by UN Comtrade showed biggest changes in the world’s industrial production over the last 10 years, pointing out that the MVA of the high-tech content industries has been increasing more rapidly than in many other sectors.

A Vietnamese worker reportedly creates a too low MVA if compared with that in regional countries and in the world, while the problem has not been improved over the last 10 years.

In 2000, the MVA of a Vietnamese worker was 1/3.5 of a Chinese worker, 1/3 of Indonesian, 1/5 of Thai, and 1/20 of Malaysian.

After 10 years, the figures remain very low – 1/5, 1/3, 1/5.5 and 1/10, respectively. The ratio of MVA/GDP of Vietnam is also the lowest in the region, just accounting for 20 percent of GDP, while the figures are 34 percent for China and Thailand.

The problem not only lies in the small industrial added value created, but also in the low content of the technologies in production. The industries with medium and high technology content just account for 25 percent of the industrial value in 2005-2009, much lower than the 60 percent of Thailand, Malaysia and China.

According to UNIDO, the technology content of Vietnamese industries that make products for export nearly has not changed over the last 10 years.

Only 12-13 percent of industries use high technologies, 10 percent medium technologies, and 60 percent low technologies.

Tam Thoi

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