Philippe Scholtes has worked as a chief representative of UNIDO in Vietnam since January 2003. He is also director of a technical co-operation programme between the UNIDO and the Vietnamese Government and is in charge of drafting cooperative programmes for the 2003-2005 period and the 2006-2010 period.

According to Mr Scholtes, there is no an accurate definition of what is called an industrialised country or newly industrialised country. However, Vietnam needs to learn about the criteria of an industrialised country such as the proportion of the processing industry or the growth index of the processing industry in GDP so that it will strive to become an industrialised country by 2020.

In comparison with other countries boasting similar levels of development, Vietnam has obtained important growth indexes with an annual per capita income of US$600-700 and industrial production accounting for more than 40 percent of GDP. The 10^th National Party Congress set a target of raising industrial contributions to GDP to 43-44 percent by 2010.

Notably, apart from processed products like rice, coffee, crude oil making up a large proportion of Vietnam’s total export turnover, processed industrial products are still more than 70 percent worth of export value. This shows that the processing industry plays a pivotal role in developing the national economy.

If Vietnam continues to maintain its GDP growth rate as it has achieved in the renewal process, the country is likely to become industrialised by 2020, said Mr Scholtes.

Vietnam had a special place in UNIDO policy. The UNIDO opened its representative office in Vietnam in 1978 at the time when there were only 20 UNIDO rep.offices operating in more than 80 developing countries worldwide.

Regarding the technical co-operation programme signed recently by the Vietnamese Government and the UNIDO, Mr Scholtes said the programme aims to help medium and small sized enterprises access advanced technologies and new creativity to enable them to become highly competitive enterprises in the international arena. Foreign financial resources for the Vietnamese industry are limited. Donor countries do not find the industrial sector attractive. Theoretically speaking while Vietnam is pursuing the socialist-oriented market economy, private domestic and foreign investors have to make contributions to the country’s industrialisation. But, in fact, donor countries do not see clearly their roles in the industrialisation process and they often channel money into projects for poverty reduction, rural development, environment improvement or institutional capacity building. As for private investors, they can also gain economic benefits and market shares in the process of cooperation to contribute to Vietnam’s socio-economic development. The UNIDO is carrying out many such projects and receiving strong support from private firms, especially multinational companies. This is a potential partnership between the Government and the private sector in Vietnam as it provides opportunities for medium-sized Vietnamese enterprises to access economic, market and modern technology information.

Mr Scholtes said infrastructure in Vietnam is still poor but the country has paid great attention to improving it. New investment methods will help Vietnam improve infrastructure in the future, including inviting private firms to investing in fields the Government used to monopolise such as roads, seaports, airports or even electricity.

To achieve the goal of becoming an industrialised country by 2020, Vietnam should give priority to investing in infrastructure, especially institutional infrastructure and human resources, Mr Scholtes said. Vietnam will need a huge contingent of highly qualified engineers, technicians and scientists to speed up its growth. Developing countries often begin their development process with exporting raw materials, and then use their abundant cheap labour forces to produce and export intermediary goods. Vietnam is like other developing countries, which are pursuing a traditional development roadmap. Vietnamese export items such as garment and footwear often come from labour-intensive sectors, which employ a large number of labourers and do not need high technology. Vietnam’s next target is the export of intellectual know-how, like software products. .

Mr Scholtes noted that Vietnam should not only pay more attention to human resources training but also carefully consider methods to access foreign technologies. The country used to lag behind due to a lack of information on technology. To overcome this, Vietnam has decided to access new technologies through foreign direct investment. Such method is rather dangerous as the country will be bound by commercial benefits, which are not always compatible with socio-economic development in the country. Vietnam should uphold its internal strength to grasp new technologies and materials in order to make proper and wise decisions to choose new technologies in the next years, Mr Scholtes advised.