The WTO membership marks a new development period of Vietnam. A three-year membership has brought in many opportunities but also poses many difficulties and challenges.
Cutting off 30 % of administrative procedures
It is undeniable that the WTO entry helps increase social investment in Vietnam, especially the private and foreign investment. If pledged FDI capital reached only US$12 billion in 2006, the figure climbed to US$21 billion in 2007 and US$71 billion in 2008. In 2009, the amount sank to only US$21.4 billion due to global financial and economic recession crisis. After three years of joining the WTO, Vietnam attracted more than US$114 billion of foreign direct investment (FDI) in more than 4,000 projects, 4.5 times greater than the amount set for the five-year period.
Vietnam's export turnover also surged, with cargo shipments to 150 countries and territories. Many labour-intensive industries like garment - textile, footwear and electronics have benefited from the WTO accession. Its goods have not been discriminated as before while Vietnamese consumers have more opportunity to use more imported goods at lower prices. According to data from the Ministry of Trade and Industry, the country’s import and export turnover reached US$150 billion annually in 2008 and 2009, equivalent to more than 160 % of the GDP.
In addition to tangible effects, the WTO accession has significantly raised social awareness of international integration. Accordingly, the Vietnam’s position has upgraded. The legal system is more consistent and the Project 30 clearly demonstrates Vietnam’s determinations for administrative reform.
According to former Deputy Prime Minister Vu Khoan, the reduction of 30 % of administrative procedures is partially resulted from the pressure of international integration. Opening up the market, removing tariff barriers, applying non-discrimination principles, eliminate subsidies and adopting transparent public policies have helped Vietnamese enterprises expand their operating scales and form new business standards.
Keeping old ways
Vietnam’s issuance of policies is more transparent in the past three years but it is still unpredictable. In 2007 and 2008, Vietnam slashed higher and faster tax rates on imported meat than entry commitments. The sudden tax cut and absence of technical barriers against imported meat led to a massive flooding of foreign meat in Vietnam in 2009. The aftermaths of this unprofessionalism are the bankruptcy of many farmers and bad quality meat for consumers.
On the other hand, after three years joining the WTO, the information about bilateral and multilateral commitments is still limited to Vietnamese enterprises. According to the Ministry of Industry and Trade, only 20 % of enterprises know to make use of WTO entry advantages such as tariffs and origin of goods while the rest are inertia. This causes the loss of competitiveness of Vietnamese products in negotiating contracts. Poor product competitiveness will entail weak national competitiveness.
In the financial and monetary sectors, the forecasting and macro management have revealed some troubles. Subsequently, about 20 % of small and medium enterprises go bankrupt because of their limited access to capital while about 60 % are experiencing many difficulties. Especially, they cannot balance inputs and outputs as a consequence of rising raw material prices and capital shortage. Many have to adapt to survive and develop. According to many experts, such policymaking will undermine business confidence.
Former Deputy Prime Minister Vu Khoan said that Vietnam is in the middle of contradictory choices. The first contradiction is the choice between growth and quality. The quality means productivity, sustainability, macro stability, social security.
Contradictorily, if macro stability is pursued, monetary policies will be tightened, leading difficulty to develop. If monetary policies are loosened, growth target will be reached but the macro instability will occur.
The second contradictory choice is the balance between domestic and foreign markets. Currently, overseas markets contribute to 60 % of the country’s GDP but if we do not take advantage of the domestic market, we will give it to foreign enterprises.
The third contradictory choice is the state intervention with market-driven regulation. If we loosen the market too much, we will hardly control but if we tighten, our enterprises will difficulty develop.
The three-year WTO membership is not long enough for Vietnam to fully integrate with the world economy. Thus, we need to know more about the rules of market economy, market regimes as well as WTO rules, otherwise we will difficultly have appropriate behaviours.
If we want to promote the advantages and limit challenges, according to experts say, we need to speed up reforms, improve growth quality and enhance competitiveness of industries and businesses.
H.H
Vietnamese
