Business
Vietnam’s digital trade projected to generate US$42 billion by 2030: Expert
Reaping the benefits from digital trade requires conducive and open policy settings in Vietnam and across the region, said an AlphaBeta economist.
Economic value for Vietnam’s economy from digital trade in 2017 was estimated at VND81 trillion (US$3.5 billion) and could potentially rise to VND953 trillion (US$42 billion) by 2030, according to Konstantin Matthieus, an economist at strategy and economic advisory company AlphaBeta.
Matthieus referred digital trade to the distribution, marketing, sale or delivery of goods and services supported by cross-border data flows.
“For Vietnam, digital trade would benefit all sectors, in particular traditional sectors such as infrastructure, financial services and manufacturing,” he stated.
Export value of digital goods and services in Vietnam amounted to VND97 trillion (US$4.3 billion) in 2017, and is forecast to grow by 570% to VND652 trillion (US$29 billion) by 2030, Matthieu said at a workshop held by the Central Institute for Economic Management (CIEM) discussing the prospect of digital trade for Vietnam on March 26.
“If digital was a sector, it would be Vietnam’s eighth largest export sector,” Matthieus said.
In spite of such huge potential, digital trade is often overlooked in Vietnam, as the country currently lacks suitable measurement methods to evaluate the importance of trade on digital platform in terms of exports or the domestic sector, he continued.
“Reaping the benefits from digital trade requires conducive and open policy settings in Vietnam and across the region,” Matthieus added.
However, the economist acknowledged a cautious approach of the Vietnamese government towards digital trade is shared by governments globally, given the necessity for protecting privacy of citizens, localizing data for national security, risk of domestic firms losing to large multinationals, and tax base erosion.
According to Matthieus, Vietnam should take action in three crucial areas in order to address perceived concerns relating to digital trade.
Firstly, it is important to ensure clarity around type of data to be shared, boundaries of sharing and the type of consumer consent that is required, while encouraging interoperability between digital frameworks.
Secondly, Vietnam should set well-balanced Internet Intermediary Liability (ILL) regulations, which consider “safe harbor” policy to address platform liability over content distributed through internet platforms.
And finally, he recommended Vietnam reduce stringent local establishment requirements; reduce the maximum tariff rate on ICT goods and their inputs; relax restrictions in foreign investment, competition policy and cross-border data flows.
Nguyen Dinh Cung, CIEM’s director, said Vietnam has seen considerable benefits coming from digital trade, but the future prospect is much more promising.
Economist Pham Chi Lan said inconsistent and outdated data is one of Vietnam’s major restrictions to digital trade.
Moreover, the legal system remains “overlapped and vague”. Recently, the government has issued new regulations supporting the development of high technology for productivity enhancement, however, even these new rules are infeasible, Lan added.
Lan also pointed to the fact that nearly 98% of Vietnamese enterprises are micro, small and medium enterprises (MSMEs), which do not have appropriate corporate governance in place and limited financial capability to fully capitalize on advantages of digital trade.
Nevertheless, Lan said Vietnam with its current” golden population structure” must grasp this opportunity right now, as it would be “much harder in the future.”
Overview of the workshop. Source: Nguyen Tung.
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“For Vietnam, digital trade would benefit all sectors, in particular traditional sectors such as infrastructure, financial services and manufacturing,” he stated.
Export value of digital goods and services in Vietnam amounted to VND97 trillion (US$4.3 billion) in 2017, and is forecast to grow by 570% to VND652 trillion (US$29 billion) by 2030, Matthieu said at a workshop held by the Central Institute for Economic Management (CIEM) discussing the prospect of digital trade for Vietnam on March 26.
“If digital was a sector, it would be Vietnam’s eighth largest export sector,” Matthieus said.
In spite of such huge potential, digital trade is often overlooked in Vietnam, as the country currently lacks suitable measurement methods to evaluate the importance of trade on digital platform in terms of exports or the domestic sector, he continued.
“Reaping the benefits from digital trade requires conducive and open policy settings in Vietnam and across the region,” Matthieus added.
However, the economist acknowledged a cautious approach of the Vietnamese government towards digital trade is shared by governments globally, given the necessity for protecting privacy of citizens, localizing data for national security, risk of domestic firms losing to large multinationals, and tax base erosion.
According to Matthieus, Vietnam should take action in three crucial areas in order to address perceived concerns relating to digital trade.
Firstly, it is important to ensure clarity around type of data to be shared, boundaries of sharing and the type of consumer consent that is required, while encouraging interoperability between digital frameworks.
Secondly, Vietnam should set well-balanced Internet Intermediary Liability (ILL) regulations, which consider “safe harbor” policy to address platform liability over content distributed through internet platforms.
And finally, he recommended Vietnam reduce stringent local establishment requirements; reduce the maximum tariff rate on ICT goods and their inputs; relax restrictions in foreign investment, competition policy and cross-border data flows.
Nguyen Dinh Cung, CIEM’s director, said Vietnam has seen considerable benefits coming from digital trade, but the future prospect is much more promising.
Economist Pham Chi Lan said inconsistent and outdated data is one of Vietnam’s major restrictions to digital trade.
Moreover, the legal system remains “overlapped and vague”. Recently, the government has issued new regulations supporting the development of high technology for productivity enhancement, however, even these new rules are infeasible, Lan added.
Lan also pointed to the fact that nearly 98% of Vietnamese enterprises are micro, small and medium enterprises (MSMEs), which do not have appropriate corporate governance in place and limited financial capability to fully capitalize on advantages of digital trade.
Nevertheless, Lan said Vietnam with its current” golden population structure” must grasp this opportunity right now, as it would be “much harder in the future.”
