The industries include electronics, automobile, motorbike, shipbuilding and food processing, steel, petrochemicals, footwear and garments, software, environment-friendly infrastructure equipments, heavy equipments and agricultural machines.
The list has been associated with the list of supporting industries such as spare part and engine, chassis and printed circuit boards.
Vietnam vows to become an industrial country
Twelve industries have been put on the table for consideration, but the taskforce would cut down to five to gather investment resources. The list would be ready by March 2012 before it is submitted to the government.
“Key industries” is understood as the industries which can generate the driving force and lead other economic sectors. They are also the industries which can create the positions and brands typical for national products.
The list of key industries has been put forward after experts said that in order to fulfill the industrialization process by 2020. Vietnam needs to outline the key industries which will receive timely and reasonable support. The development of the key industries would help lead other industries to develop.
Vietnam is striving to become a basically industrial country with the industrial production value accounting for 40-41 percent of GDP, and the manufacturing industrial value accounting for 40 percent of the total industrial production value.
In late 2004, at the workshop on strengthening the competitiveness of Vietnamese industries held in Hanoi, Professor Kenichi from Japan said: “Ten years ago, Vietnam once discussed the issued. And we continue discussing in the next 10 years. It is now the right time to make decisions.”
And debate has been continuing since 2004. In 2007, the Prime Minister released the Decision No 55, approving the list of priority and key industries for 2007-2010 with the vision until 2020 and some policies to develop the industries.
The decision said that there are three key industries, namely mechanical engineering manufacturing (automobile, shipbuilding, comprehensive equipments, agricultural machines and electromechanical); electronic and telecommunication parts, information technology products; and the products from new technologies (new energies, recycled energy, software industry and digital content).
However, the three key industries have been developing very slowly since then, and after five years of implementing the decision, Vietnam still thinks about choosing key industries.
Opinions vary
Despite the long debate, experts still have not reached consensus about the key industries. According to the Japanese specialists in the taskforce, of the 12 above industries, only the motorbike and garment industries are relatively strong, while the others all remain weak,
The industries do not have Vietnamese own designs, cannot receive technology transfer, while the supporting industries are still lack and weak, and workers lack skills. The development policies have been vague which have not brought effects. Especially, automobile, metallurgy and electronics have become the burden with big trade deficits.
While Japanese specialists advise Vietnam to choose motorbike production as the key industry, because the production has been developing well, Vietnamese experts do not agree to the suggestion, believing that the industry would not help a bright prospect, when the demand for motorbikes has been decreasing.
Vietnamese experts want to choose the automobile industry because it seems to have a better future. Once the industry develops, this would lead to the development of many relating industries, such as electronics (which now account for 30 percent of the value of a car), steel (30 percent), material industry and engine manufacturing technology.
However, other experts argued that the automobile industry was once chosen, but it has not been developing in the last five years. What Vietnam has had in the industry is just the assembling skill.
The same situation is occurring with the electronics industry. Vietnamese enterprises simply import parts to assemble domestically to take full advantage of the cheap labor force, tax incentives and land preferences.
Tran Thuy
Business & Investment Opportunities
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