Impacts of free trade agreements on Viet Nam’s economy (Part 3 and end)

14/08/2016

Kết quả hình ảnh cho Impacts of free trade agreements on Viet Nam’s economy

Solutions for the future
To implement the FTAs, to meet the requirement of integration, in the future, efforts should focus on some urgent work as follows:
Regarding economic institutions
International economic integration requires acceptance to “play” by “the rules of the game.” Institutional innovation is a breakthrough, linking domestic institutional reform with harmonious, and smooth institutional integration. Reality shows that the business environment has not much improved and therefore external liberalization has not really come with the liberalization of internal resources. Without appropriate legal system, and business environment, advantages of the FTAs will not be harnessed. Besides, there must be a specialized apparatus with clear mandates to monitor, supervise, and evaluate the effectiveness of laws and institutions.
Reform of the institutional business environment must take appropriate steps, and be placed in systematic relation: prior work must pave the way for follow-up work, and not to create legal conflicts and policy inconsistencies. With a low starting point, and limited resources, the economy of Viet Nam “has its own characteristics,” how can Viet Nam reach international standards and best practices that advanced countries take several hundred years to gain.
Administrative institutions should have provisions requiring agencies and administrative officials to bear ultimate responsibility for administrative violations within their jurisdiction. Therefore, administrative procedures must be institutionalized and require strict enforcement. A team of capable systematically trained civil servants with professional ethics is needed.
The Commercial Law, mechanisms and management policies need to be supplemented and improved in order to facilitate trade. The Law on Export and Import should be amended for consistency with provisions of the Constitution and existing laws; compatible with commitments and treaties to which Viet Nam has signed or is negotiating, the approved Strategy on tax system reform in the period of 2011-2020. In addition, obstacles, gaps, and overlaps must be removed to ensure consistency, completeness, synchronization and feasibility.
On reform and business support
A survey in 2011 showed that 95% of the 2,500 businesses in 10 provinces and cities were super small. This ratio remained the same in 2014, the majority of them used outdated technology of the previous 2-3 generations. Of these, 75% of machines, production lines were of the 1960 to 1970; 75% of the equipment were fully depreciated; and 50% were refurbished. Only about 30% of small and medium enterprises have had access to bank loans, hence businesses of this sector have not had sufficient financial capacity to invest in machinery, and technology. Expectation for foreign investors’ transfer and roll out of technology is not a reality. Only 5% of FDI enterprises have applied high-tech, 80% have had relatively low medium technology. Contracts of technology, and know-how transfer are limited.
Centers and associations must have responsibility to support small and medium-sized enterprises, and newly established enterprises in the training of human resources, management skills, administration, market access, provision of information on market as well as the investment environment, and administrative procedures. In particular, these centers must support businesses access to capital through close collaboration with local Credit Guarantee Fund for small and medium-sized enterprises and other financial funds for enterprises in this sector. It is urgent to quickly adopt environmental management systems, such as ISO 14000, HACCP, good management practices (GMP), and good agricultural practices (GAP).
There should be a law to support small and medium-sized enterprises, connecting small and medium-sized enterprises with global value chains. Address issues of exchange rates, lending rates, and create favorable conditions for enterprises to have access to bank loans. These are not only to lower interest rates but more importantly is to improve lending procedures, enabling enterprises to get loans by the collateral and giving them guidance to be creative and focus on potential projects and sectors.
The possibility of being sued or retaliated will increase in the future, so preparation and transparency of the books, accounting, tracking information and coordinating information disclosure, good understanding of the rules, lobbying and diplomacy should be done by enterprises. Overseas Vietnamese can play a role in helping Vietnamese commodities to set foot on the small and retail markets.
Renovating the provision of market information and trade promotion
It is necessary to bring about powerful changes to provide timely information on political situation, market, policies and management measures for export and import, and barriers. Accordingly, trade promotion activities, assistance of enterprises in finding business partners, new markets, new products, penetrating into distribution channels, participation in fairs and exhibitions can be done immediately. Make full use of export portal of Viet Nam (www.vnex.com.vn) to promote the brands of the businesses to foreign partners in a fastest manner with lowest cost.
Preparation of human resources
Within ASEAN, Viet Nam ranks low in the Table on assessment of human resource development. To facilitate the participation of Viet Nam enterprises in the global supply chain, there is a need for a modern education system that turns out capable and skillful human resources.
With the completion of 14 FTAs in the coming time, Viet Nam will have free trade relations with 55 partners, including 15 members of the G20. This is the foundation for Viet Nam’s international integration at higher level, extending space for development cooperation in future. There will be no market economy without people who fully understand and operate well the rules of the market economy. This is the lesson of the “Asian dragons” that Viet Nam needs to learn. Thus, the preparation of human resources for the present and the future is very important.


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All comments [ 10 ]


John Smith 14/8/16 21:10

The FTAs have so far contributed to improving the economy.

Gentle Moon 14/8/16 21:11

Along with policies to support private firms, it is crucial to strengthen the financial market structure and boost the comprehensive growth of all kinds of markets.

LawrenceSamuels 14/8/16 21:13

The country should enhance transparency, improve inspection to identify flaws, boost judicial and public administration reform as well as improve the investment climate.

Jane smartnic 14/8/16 21:14

Many market laws are still not fully applied making it hard for Việt Nam to compete with other similar ASEAN economies that have better technology, more skilled labour and stronger capital.

yobro yobro 14/8/16 21:15

Việt Nam should continue to complete institutions related to ownership and development economic sectors as well as business types.

Love Peace 14/8/16 21:16

Việt Nam has economic relation with 224 countries and territories. According to the Việt Nam Chamber of Commerce and Industry (VCCI), 12 signed FTAs including the TPP, ASEAN, ASEAN-India, ASEAN-Australia/New Zealand, ASEAN-Korea, ASEAN-Japan, ASEAN-China, Việt Nam-Japan, Việt Nam-Chile, Việt Nam–Korea, Việt Nam-Eurasian Economic Union, Việt Nam-EU. Việt Nam was waiting for RCEP (ASEAN+6), Việt Nam-Israel and Việt Nam-EFTA.

MaskOf Zero 14/8/16 21:17

Active integration will boost corporate competitiveness.

Only Solidar 14/8/16 21:18

Difficulties are inevitable at first, thus enterprises ought to design their integration moves carefully.

Pack Cassiopian 14/8/16 21:19

Domestic enterprises have capitalised on only a fragment of the benefits brought about by FTAs, while the foreign-invested sector, especially manufacturing for export are earning the most advantages.

Deck Hero14 14/8/16 21:20

Businessmen need to ready themselves for relevant trade defence measures as well as quality and copyright regulations, among others.

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