World Bank (WB) experts made major recommendations to increase Vietnam’s economic competitiveness, at a workshop in Hanoi on July 4.
They suggested that Vietnam develop transport infrastructure and logistics services, simplify regulatory procedures for cross-border trade, and restructure agricultural and processing industry supply chains in order to participate in global value chains.
According to the experts, Vietnam’s trade growth fuelled by trade liberalisation has reached a saturation point. Since 2003 the country has enjoyed an annual average growth rate of 18 percent thanks to its constant effort to improve the export structure, thus reducing raw material exports, expanding the processing industry, and quickly accessing international markets.
However, they said Vietnam has been less successful in diversifying its exports basket and in moving up the global supply chains. Its ability to escape the “middle-income trap” is also predicated upon its ability to create a more competitive and efficient economy.
They highlighted a number of potential obstacles facing Vietnam, such as domestic businesses’ widening trade deficits, sluggish trade diversification, low added values of products, and technological deficiencies.
The experts said success will require considerable and sustained effort by all stakeholders, with the government playing the role of a facilitator and coordinator.
Political commitment will be needed from the top leadership, given that the recommendations will affect country competitiveness and directions of social and economic development at large.
WB Vietnam Country Director Victoria KwaKwa emphasised international economic integration brings both opportunities and challenges.
She said improving the quality of services, infrastructure, and trade will play an important role in promoting the country’s key exports. To raise added value in global supply chains, Vietnam should accelerate administrative reform at a macro level, facilitate trade activities, and seek to hone its competitive edge.