VietNamNet Bridge – Vietnam, which expects the export turnover
increase by three folds by 2020, is now calling for investments in the
logistics industry in order to improve its competitiveness.
Bad logistics services install barriers to foreign trade
In principle, good infrastructure
system and logistics services would help increase the GDP by one percent, and
if the logistics expenses can be reduced by 10 percent, Vietnam would save the
natural resources worth two percent of GDP to develop economy.
The transport fees, logistics and
border service management expenses have been described as the “trade barriers,”
which are nearly equal to 70 percent of the tariffs of 70 out of the 91
surveyed countries.
According to the General
Statistics Office, in 1997-2011, while the cargo transportation volume
increases by 12.1 percent per annum and trade by 18 percent per annum, the
investments in infrastructure and transport services did not grow. Especially,
the minus investment growth rates were seen in 2004, 2005, 2006, 2010 and 2011.
As a result, the trade
infrastructure system and logistics services remain very poor, which has put
Vietnam on the lower positions than its regional rivals in terms of time,
expenses and reliability, according to Pham Minh Duc, a senior economist of the
World Bank Vietnam.
Vietnam has got considerable
improvement in the Enabling Trade Index (ETI) report by the World Economic
Forum in recent years with the grade upgraded from the 89th in 2010 to 71st in
2011 and 68th in 2012. However, Vietnam is still on the lower grades in the
customs management efficiency index and the transparency in border management
due to the unreasonable procedures conducted manually, thus causing corruption.
Meanwhile, the World Bank has
found out that enterprises would have to bear 0.8 percent of the value of the
goods for every day of getting stuck at the border gates.
Vietnam vows to develop logistics industry
Duc of the World Bank said that
it is reasonable for Vietnam to push up the investments in the logistics industry,
since it hopes to see the export turnover increasing by three times by 2020.
Former Deputy Minister of
Industry and Trade Luong Van Tu noted that the logistics industry has not
developed, even though there are thousands of logistics companies. The problem
is that they are all small which lack experiences and financial capability.
However, investments in the
sector would gobble up a lot of money, while the financial capability of
Vietnam remains limited once it heavily depends on public investments.
In principle, Vietnam can think
of developing the logistics industry under the mode of private public
partnership PPP, the one being applied in many other countries in the world.
However, PPP, though having been activated in Vietnam for a long time, still
has not become a favorite choice, because of the disagreement between the state
and the investors in sharing profits and risks.
In fact, Vietnam has been
repeatedly calling for the investment in PPP transport infrastructure projects
for a long time. Nevertheless, very few projects have been developed under the
unfamiliar mode.
The government of Vietnam has
been urged to set up necessary legal documents on PPP-mode investments which
can harmonize the benefits of the State and the investors. Only by doing this,
will Vietnam be able to successfully mobilize capital from non-state different
investment sources.
DNSG
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