Recently, the Ho Chi Minh Economics Institute surveyed 12 enterprises in some industries facing the greatest impacts of the international integration process, such as food processing, textile and garments, electricity and electronics, and mechanics. The survey result highlights many difficulties encountered in the city’s preparations for international integration.
The surveyed enterprises include Tribeco, Vinamilk, Vina Acecook, Thai Tuan Textile and Garment, Legamex, Saigon 2, Lu Gia Electricity and Mechanics, Ngo Han Electric Wire, Thu Duc Electricity and Mechanics, Dien Quang Bulb, and Sinco Machinery. The survey shows that most enterprises face difficulties in accessing integration information. Many of them said that they did not have any information about the progress, content and results of negotiations between Vietnam and partners. Also, many enterprises are inactive in seeking information and preparing for international integration. Enterprises often wait for guidelines. Meanwhile, the information that departments provide cannot meet concrete demands of enterprises in their fields.
In fact, enterprises are faced with many difficulties that may hamper their competitiveness if they are not settled. In the food processing industry, enterprises want to expand their production activities and diversify their products. Therefore, they have proposed that local authorities issue flexible policies on land allocation. Also, they face technical barriers in their export to hard-to-please markets. For example, some countries such as the US require production consumption time of at least three years, while the time for the Vietnamese food processing industry was just at least one year. Therefore, the enterprises have proposed the State to issue tighter policies on expanding the safe time for consumption of processed food products. Difficulties in marketing and advertising are due to a regulation controlling marketing costs at less than 10 per cent of revenues. As food processing enterprises in Ho Chi Minh City have little budget, so they cannot follow foreign firms, accepting losses to compensate advertising costs. Also, enterprises said that the Government should gather inputs and comments for its WTO negotiation with countries, relating to the import of materials of local enterprises to avoid any excessive concession (if any), producing negative effects on the material markets of Vietnamese enterprises.
Meanwhile, textile and garment enterprises face difficulties in seeking qualified human resources. Enterprises in the industry, except for some major ones, have yet to give proper attention to copyright and sample issues. Also, as they depend heavily on foreign firms to provide materials, their effectiveness remains constrained. Therefore, according to enterprises in the industry, the State should issue policies on develop local the materials and support market. The city should implement a project on building a textile and garment material and accessories centre. At the same time, the local enterprises face many ‘technical’ barriers in exporting their products to some countries. In fact, some textile and garment companies in Ho Chi Minh City are making efforts to develop the SA8000 standard but they failed to meet the requirements for working hours. If enterprises observe SA8000 regulations on working hours they fail to meet requirements on incomes of workers.
Enterprises in electricity and electronics face financial and technological strength in competition. This is the biggest difficulty for them during international integration. The present taxation policies have encouraged enterprises to expand their production instead of renewing technology. In addition, enterprises propose more open customs procedures, and an improvement of skills of checking officers. At the same time, import tax should be exempted for modern equipment and machines, thus encouraging enterprises to renew their technology and equipment. At the same time, some enterprises complain about the high interests and complicated procedures for loans. Therefore, they have proposed interest subsidies and further reform for banking procedures. Even though some enterprises have promoted their exports to Europe and the US, most enterprises complain that they have yet to meet conditions to explore foreign markets. They need support from the local authorities in the coming time.
Mechanic enterprises have made efforts to renew technology and equipment, so they have gradually built up their prestige in the market. However, they have proposed policies on reducing tax for some materials, accessories, spare parts and machines and corporate income tax rate, which is put at 28 per cent.
According to experts, for international integration to act a stimulus for the development, Vietnam in general and Ho Chi Minh City in particular should make further efforts to improve their investment and business environment, providing more support for local enterprises. And more importantly, enterprises should have good understanding and awareness of international integration, thus trying to improve their competitiveness.
Hai Nguyen
Vietnamese
