WTO membership- a major contributor to exports and economic growth

In 2007, Vietnam officially became the 150^th WTO member after years of negotiation efforts, marking an important milestone in the process of its international economic integration.

In a recent interview granted to a Radio Voice of Vietnam (VOV) reporter, International Monetary Fund (IMF) Chief Representative in Vietnam Sanjay Kalra touched upon limitations and challenges facing Vietnam in its international integration process after it joined the WTO eight years ago.

The results achieved after 8 years of Vietnam’s entry to the world largest trade body are of paramount importance as the nation has become an attractive destination for foreign investors. More and more major foreign enterprises and groups are bent on investing in Vietnam to take advantage of incentives investment policies.

Increased foreign investment has significantly contributed to export growth and economic stability of Vietnam over the past years. On a more positive note, Vietnam’s drastic changes in laws and institutions have helped simplify procedures and improve the business and investment environment, he said.

The Southeast Asian nation’s underway commitments after its admission to the WTO such as cutting taxes, opening the market for goods and services have offered Vietnamese consumers plentiful opportunities to enjoy better products at cheaper prices, the IMF official noted.

Regarding Vietnam’s sustained efforts for international integration by conducting negotiations and signing bilateral and multilateral agreements, Sanjay Kalra said the international economic integration process is an inevitable trend for Vietnam. Free trade agreements provide a wealth of opportunity for both consumers and businesses, helping Vietnamese goods and services have easier access to the most demanding and potential markets.

“I hope that Vietnam will speed up negotiations and is likely to conclude important free trade agreement (FTA) agreements and the Trans-Pacific Partnership (TPP) Agreement in the time ahead and the international economic integration is a long process.” he added.

Concerning measures to cope with challenges and capitalize on the advantages presented by the WTO, Sanjay Kalra underlined the need to reform and improve the competitiveness of Vietnamese enterprises both domestically and internationally in a bid to make better use of the advantages of the WTO.

There is much that needs to be done in connection with institutional and procedural reforms, infrastructure improvement and investment cost reduction for businesses. But the forefront is the necessity to improve the capacity and skills of Vietnamese workers, enabling them to grasp better employment opportunities and keep pace with the waves of foreign investment coming to Vietnam.

Talking about prospects for Vietnam's economy in 2015, the IMF representative said the national economy would continue its steady growth since 2014 with low inflation, relatively stable exchange rates and deeper economic integration. However, future challenges require the Vietnam Government to make stronger reforms for 2015- 2016.

For example, banking reform will help stabilize the financial market while reform and equitization of State-owned enterprises (SoEs) will help attract more capital and improve business governance and reduce the burden on the state budget.

It is essential take into account the impacts of the global economy in 2015 as declining oil prices benefit the economy but will affect Vietnam’s budget revenues.

Generally, the outlook for 2015 is positive but the nation needs to spare no effort to maintain macroeconomic stability and improve infrastructure facilities, he noted.