Vietnam must consider supporting industry a priority, for which a new policy mindset is needed to focus on enhancing enterprises’ capabilities, instead of preferential treatment, according to Deputy Prime Minister Trinh Dinh Dung.
Overview of the conference. Source: VGP.
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This would be key for the country in its quest for sustainable and long-term development, while avoiding the middle-income trap, Dung added.
Industrialized countries have been focusing on developing their respective supporting industries from the early stage through specialized legal framework and regulations, he continued.
After 30 years of reform, Vietnam currently has 3,000 enterprises operating in the supporting industry, accounting for 4.5% of total enterprises in the manufacturing and processing. Those enterprises have created jobs for over 550,000 direct employees.
Some major Vietnamese enterprises have joined the global value chains of multinational companies, Dung informed.
However, the current policies are mainly focused on providing incentives for investment projects in the supporting industry, instead of enhancing capabilities for enterprises.
Dung stated that local companies are in need of the government support, as they lack the production capabilities to receive those incentives and preferential treatments.
Additionally, local products are mostly simple components and spare parts using low- to mid-end technologies, which account for small proportion in value of final products. Meanwhile, high tech products are mainly provided by FDI enterprises.
More importantly, Vietnam still lacks flagship enterprises that play as growth engine for the whole sector, Dung stressed. He requested Vietnamese enterprises make stronger commitment for the development of supporting industry.
Dung also expected Vietnamese enterprises to target global markets and join global value chain, especially in the context of Vietnam’s extensive integration in the global economy.
