VIETNAM ENTEPRISES- DEVELOPMENT AND INTEGRATION: Some issues after VietNam accessing WTO 21/10/2008 01:50:00 985

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1- Summarizing the international economic integration


Since 1980s, VietNam have established bilateral relations with many nations and international and regional organizations, such as ASEAN, International Monetary Fund (IMF), World Bank (WB). To integrate globally, VietNam began to negotiate for accessing WTO in 1995. After 11 years for negotiations, VietNam has became a WTO member in 2007. From that time to now with nearly 2 years, the VietNam economy has integrated deeper into the world economy; the integration process has affected Vietnam economy and enterprise sector as well in many aspects.


2- Integration’s implications for enterprises


- For opportunities; firstly, to obey the WTO commitments, the legal system will be perfected and more transparent. This is very important precondition to help the State reform the institutional and policy systems; and enterprises have good opportunities to expand their business activities; secondly, when markets expanded, enterprises will sell their goods and services in the countries those participate committed agreements with reduced tax levels. This will facilitate enterprises expanding investment scales; thirdly, enterprise will be not discriminated in the commerce disputes thanks to common dispute settlement mechanisms.


- For challenges; Firstly, competition will be very fierce in the domestic and foreign markets. Competition also takes place between Viet Nam Government and other government in creating precondition and condition for enterprises to invest and do business. Secondly, the rich- poor gap will be wider; some enterprises depend on the state’s subsidy will be bankrupt; some unskilled worker will be unemployed; Thirdly, the dependence among nations and economies will be increased; the changes in the world market will affect strongly the domestic market.


According to the report “Assessing the WTO accession to the macroeconomic and business environment”, 99% enterprises asked said that the WTO accession has brought about important changes in the economic policies of VietNam . However, the report also showed that enterprises still disappointed about the business environment because the improvement is very slowly, and the gap between legal regulations and the implementation in the fact is very wide.




1- State owned enterprises. The State has issued many policies to help SOE operate in the competitive, open and transparent environment, such as 1- reforming and arranging SOE, ownership type transferring (equitizating, selling, and leasing,...); identifying that all enterprises must obey the laws; eliminating monopoly and vested interest of SOE; implementing the non-discrimination WTO principle. 2- each enterprise has to assess itself to improve their competitiveness. 3- improving the business activities; furthering technology application,...4- cooperating with other domestic and aboard enterprises.


Although getting a lot of achievement, the SOEs still face many challenges. For example, for SOE equitization, the process is very slow. In many cases, it is not transparent leading to the losses of the state property and the discontent from the society.


- Private enterprises. In the recent years, the private enterprises have gained remarkable achievement. By the end of 2007, there were 307,008 enterprises established. However, the private enterprises still face many difficulties and suffer a lot in terms of accessing capitals, lands, and entering foreign markets...


- Foreign invested capital enterprises. According to the Ministry of Planning and Investment, by the end 2007, there were above 9,500 project have received licenses with total of registered capital reached 98 billions USD. At present, there is a significant change in terms of polices for attracting foreign direct investment (FDI). If in the past, we had to attract FDI as much as possible (in many cases regardless environment and social factors), nowadays, due to the requirements of sustainable development, we have chosen more carefully for FDI projects.




1- Improving national competitiveness. As we know, competition is a motivation for development. The economic integration process is creating good conditions and furthering enterprises to improve their competitiveness to exist and develop; however the enterprise competitiveness depends so much on national competitiveness.


In terms of national competitiveness, there are many definitions, but understood commonly as socio - economic environment of one nation to ensure effectively resources allocation, achieve and maintain sustainable development, guarantee socio-economic stability and improve life standards for people. National competitiveness creates environment for enterprise competitiveness; Based on the national competitiveness, and market signals, each enterprises identifies its business strategy and allocate its resources to guarantee effectiveness in business activities.


2- Enterprise Development. Some solutions to develop the enterprise sector as the following:


- Firstly, increasing responbilities and operation quality of agencies at provincial levels in enterprise development


- Secondly, paying attention to develop enterprises in the rural areas. The resolution of the 7th conference of the X central committee of the Party has decided very basis issues related to the development for agriculture, farmers, and rural areas. In which, the resolution paid attention to develop more enterprises in the rural areas. Developing enterprises in the rural areas will help free production forces and make the rural areas develop harmoniously.


3- Strengthening macro management: Facing economic difficulties, recently the government has issued 8 solution groups to curb inflation, stabilize macro economy, guarantee social security. Below are some concrete issues needed to be paid attention to help enterprises develop in the new context:


- Firstly, focusing to unfold difficulties for enterprises to strengthen their ability for producing, doing business and exporting.


- Secondly, continuing to implement the saving policy in manufacturing and consuming.


- Thirdly, pricing operation under the market principle with suitable roadmap and timing.


- Fourthly, continuing to implement tightened monetary policy.


- Fifthly, implementing the social security policy.


- Sixthly, strengthening administration reform and fighting corruption.



Source: VNEP, September 2008