Talking Shop
(22-11-2007)
WTO ushers Viet Nam into world economy
A year ago this month, the World Trade Organisation voted to admit Viet Nam as a member. Luong Van Tu, former Deputy Minister of Trade and head of Viet Nam’s WTO accession negotiation team, spoke to Viet Nam News reporter Phuong Hoa about Government efforts to integrate into the global economy while ensuring sustainable growth.
What is the Government doing to enable Viet Nam to participate more in the global economy?
To comply with Viet Nam’s WTO commitments, the Government has drafted or amended some 30 laws and ordinances and ministries are in the process of issuing decrees to guide implementation of the laws.
It’s also better for our economy because when foreign enterprises come to a country, they usually consider the consistency and predictability of the legal environment a leading factor in making their investment decision.
By comparison, over the past five years, China has amended roughly 2,500 different regulations to shift into a market economy.
Does economic integration mean that our economy will be more vulnerable to volatility in the global economy?
An objective factor is that prices of fuel and raw materials have skyrocketed around the world, impacting not only Viet Nam but a host of other countries. For example, prices of oil, steel and many raw materials have increased non-stop since 2001.
As we move from direct to indirect governance of the economy, we will no longer fix prices but allow them to be widely regulated by the market. It requires a new administrative approach by government to avoid adverse impacts on the economy, but after a time, when we have had more practical experience, we can do it better.
Is the galloping consumer price index this year symbolic of our vulnerability to external economic forces despite the Government’s bold measures?
The Government has cut import taxes on many products and goods, but enterprises have yet to reduce prices, so there is a problem here. The Government has put a close watch on this and assigned the Ministry of Finance to monitor and supervise the movements of companies.
Businesses have pointed out that goods which would enjoy the lower tax rates have yet to dock at Viet Nam ports.
A major challenge facing the Government is how to control price gouging while guaranteeing profits for producers. The Government is moving from direct to indirect management of the economy. Before, it could issue orders and fix prices by decree, but now, WTO accession requires us to shift towards a market economy with a socialist orientaion and we have to govern using indirect methods, meaning that the Government must issue laws or regulations and enforce them equitably.
We are implementing these changes gradually, and I think the Government has already recognised the trend and is undergoing the changes it needs time to make. Life requires us to proceed. If we don’t want to change, it means that we stand still amid the non-stop development of the world. Of course, we have to choose the changes that are best for us and help us stablise and develop our economy. It’s not like we have to develop at any cost.
Infrastructure in Viet Nam still remains poor as being seen in the eyes of overseas investors. What do you think?
One of the bottlenecks of Viet Nam is aviation. Most tourists and investors arrive in Viet Nam by air. The Government has been hastening the refurbishing of aviation services to create favourable conditions for travellers and business people to bolster tourism, trade and investment.
A number of airlines have been expanding their fleets, notably Vietnam Airlines.
For instance, domestic airlines have recently reached agreement with Boeing to buy eight B787-8 aircrafts worth about US$1.4 billion, which, along with an earlier $600 million contract, means Viet Nam has earmarked around $2 billion for purchasing aircraft from Boeing. We also are buying aircrafts from Airbus.
Also, around 17 million Vietnamese use the internet, and Viet Nam has seen rapid growth in internet use. Viet Nam now has more than 30,000 websites.
We are facing real worries, however, due to our port and road systems, and the Government is boosting its investment here. Besides capital problems, we also need a certain amount of time to rebuild this kind of infrastructure. We can’t do it overnight. — VNS
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