More opportunities for exports in 2014

The Minister of Industry and Trade Vu Huy Hoang gives readers an overview of exports in 2013 and opportunities for 2014.

Most key export commodities achieved substantial export growth last year. Approximately 22 products obtained export earnings of more than US$1 billion each, including 13 with export values of more than US$2 billion – seafood, coffee, rice, rubber, crude oil, wood and timber products, garment, textile fibre, footwear, telephone handsets and components, equipment and machinery, means of transport, computers and electronics.

VOV online: How did the economy overcome challenges to fulfill its set target?

Minister Hoang: In 2013, the economy faced various challenges and difficulties. The world economy showed signs of slow recovery and the decline of global trade pushed protectionism up. The domestic economy  faced its own internal problems, such as frozen real estate market, bad debts, large inventories, an increasing number of businesses which halted operations and found difficult to access capital.

Minister of Industry and Trade Vu Huy Hoang

However, 2013 ended with positive results in containing inflation, stabilizing the macro-economy, and ensuring social welfare. GDP is estimated at 5.4%, consumer price index (CPI) of 6.6%, stable basic exchange rate and increasing foreign currency reserves.

Import-export turnover hit a record high of US$263.5 billion, of which exports grew by 15.4%, higher than the target of 5.4% set by the National Assembly. Trade surplus reached US$862 million, equal to 0.7% of export value, much lower than the NA set target of 8%. This contributed to narrowing the gap between imports and exports, balancing trade, and stabilising exchange rates and macroeconomy.

The achievements are attributed to strict management of the Government, and great efforts of ministries, departments, associations and business community.

Since early 2013, the Government has issued various policies and strategies to remove difficulties for production and support markets.

The Ministry of Industry and Trade has also implemented a series of solutions to boost exports and reduce trade deficit. It timely ironed out snags for businesses, and built policies and mechanisms to support consumption of agricultural products, seafood, and other products like garment and footwear.

VOV online: Export achievements are attributed to FDI businesses. What do you think of the opinion that FDI businesses achieved both high export and import value, their operation is mainly assembling and manufacturing so the economy has not benefited much from the group?

Minister Hoang: In recent years, FDI businesses have made significant contributions to economic and export growth, job generation, market expansion and export restructuring.

The FDI sector’s exports in 2013 (excluding crude oil) reached US$81.2 billion, up 26.8% compared to the previous year and accounting for 61% of country’s total export turnover. Meanwhile domestic businesses face difficulties in production and export, the FDI sector plays an important role in promoting exports. The FDI sector earned trade surplus of US$6.7 billion, higher than 2012’s figure of US$4.1 billion.

The FDI businesses demonstrated a prominent role in the processing and export industry. Its export value accounted for 75% of total export turnover, some products experiencing even higher rates, such as telephone handsets and components (making up 98%, computers, electronics and components (95%), camera, film camera and components (98%) and equipment, machinery and tools (91%).

However, many FDI businesses mainly import materials for processing and exporting with low added value, depend on Vietnamese labour force comparative advantage. In addition, their investment in infrastructure, agricultural and forestry, processing industry, intermediary services and high-added value services remain limited.

To deal with the problem, the Government has devised orientations to attract and manage FDI capital for the 2011-2020 period. Accordingly, Vietnam will continue to improve the quality and efficiency of FDI capital in line with Vietnam socio-economic development strategy until 2020. It will give priority to attracting projects which use high and environmentally friendly technology, have comparative advantages and those which are able to take part in global chain of value. It will also make full use of natural resources, mineral and land, and attract investment in the support industry and those serving agriculture.

VOV online: What do you predict for export activities in 2014?

Minister Hoang: Economic experts forecast that the domestic and international economies will thrive in 2014. However, difficulties will remain, pulling consumption demand down.

Free Trade Agreements which are being negotiated will help open up the market and boost exports, such as Trans-Pacific Partnership (TPP), Vietnam-EU,   Vietnam and the EFTA (comprising Iceland, Liechtenstein, Norway, and Switzerland), Vietnam-the Republic of Korea, Vietnam and Customs Union (Russia- Belarus – Kazakhstan).

The sixth session of the 13^th National Assembly approved a resolution on export growth of 10% and trade deficit of 6%. This is a new challenge, requiring huge effort and commitment from the ministry its associations and business community.

In 2014, new export products should be made, such as medium and high-tech products to meet the world market demand in line with Vietnam’s export strategy and those with advantages of natural conditions and abundant labour forces, like seafood, agricultural products, garment, and electronics.

Businesses should not invest in producing low-added value products or those which cause environmental pollution.

The most important thing is to focus on market development for competitive products or those with high export value.

Businesses should accelerate exports into major markets, like the US, EU, Japan, China, the Republic of Korea, ASEAN and India and expand to potential new markets like Russia, Eastern Europe, Africa, Middle East and Latin America.

In conclusion, 2014 will be a challenging year for exports so in addition to State agencies’ efforts, businesses should actively grasp domestic and foreign information, and opportunities to combat difficulties and boost exports.

The ministry believes that Vietnam will fulfil the socio-economic development targets set by the National Assembly for 2014.

VOV online: Thank you very much.