HCMC’s economic restructuring slow off the mark

HCMC – There has been little progress in the planned restructuring of HCMC’s economy, experts said at a conference on Tuesday.

While HCMC is an economic driving force in Vietnam, the city’s contribution to the national economy has not met expectations, said Tran Dinh Thien, head of Vietnam Institute of Economics, in a meeting to assess impacts of Vietnam’s joining WTO and HCMC’s economic restructuring.  

“When I ask myself what big changes have occurred in the city in the last 20 years, it’s hard to find the answer,” Thien said.

The city economy still relies on providing foreign companies with outsourcing services, and external factors [like importing materials],” he added.  

According to the HCMC Bureau of Statistics, added values in all the three sectors of service, industry and agriculture have fallen annually. The three sectors are expected to contribute 57%, 42% and 1% to the city’s economy respectively in 2015.  

The service sector has experienced the fastest growth to account for 54.5% of the city’s GDP in 2010. However, a shift from manufacturing to service is not attributed to the city’s efforts, but rather the natural progress as more entrepreneurs venture into the service sector that promises higher profits.

Tran Van Bich, another economic expert, noted that manufacturing is being moved out of the city to other provinces, and the land is being taken up by service providers.  

In addition, non-State and foreign invested companies have made strong contributions to the city’s economy. Foreign invested enterprises accounted for 23.3% of the city’s GDP in 2009, up from 20.6% in 2006.

For real progress to be made, experts suggested HCMC needs breakthrough changes in red tape, infrastructure and skilled workforce numbers. The big challenge though is administrative reform.

“Choosing key sectors has been important for the city, but it’s vital to undertake institutional changes,” said Thien .  

“HCMC should have a larger vision as it develops into a modern mega city, than just trying to upgrade its current situation. I can’t imagine what the city will look like in ten years,” Thien added. 

Developing infrastructure with natural conditions and economic targets in mind and training a highly skilled workforce for the transferring of high technology are also needed for the city’s sustainable development, he said.

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Experts discuss economic restructuring

With tariffs cut in line with Viet Nam's WTO commitments and lack of techical barriers, a huge volume of imports have entered the country. — VNA/VNS Photo Kim Phuong

HCM CITY — The importance of restructuring the economy from primarily agrarian to one centred on industry and services was highlighted at a meeting held in HCM City yesterday.

Viet Nam's accession to the World Trade Organisation (WTO) has been positive for the economy but it also poses big challenges, Tran Dinh Thien, director of the Viet Nam Economics Institute, said.

After joining the global trade body in 2007, foreign direct investment into the country rose dramatically as did exports, he said.

But the WTO accession has also revealed the weaknesses of the economy, including low quality of growth, poor infrastructure, high inflation, poor human resources, and low competitiveness, he said.

The quality of human-resources has yet to meet the need of development and co-ordination between businesses to achieve a combined strength remains poor, he added.

Nguyen Dinh Cung, deputy director of the Central Institute of Economic Management, said: "We need to restructure our economic mechanism."

Economic growth in recent years has been mainly due to the transformation from agriculture to industry-services, while productivity has barely increased, he explained.

With its weak economic structure, the country will find it very hard to become a modern economy by 2020, he added.

Tran Du Lich, deputy head of the HCM City National Assembly delegation, said the problem faced by the Vietnamese economy was not a shortage of capital but how to effectively absorb it.

"Our economy rests on three weak pillars – weak economic institutions, poor human resources, and poor infrastructure – that do not ensure stability for absorbing capital in the most effective way and developing in a sustainable manner," he said.

The country needs measures to strengthen these pillars, he said.

A programme to support economic restructuring in HCM City has yielded results in the last three years but progress remained slow, he said.

In restructuring the economy, the city should focus on improving its quality and urban infrastructure, he said.

It should create a level playing field for all business sectors, continue with administrative reform, improve human-resource training, and develop infrastructure, he said.

The Government should stabilise the macro economy to retain the people's and market's trust and improve the effectiveness of public investment and the role of State-owned groups, he said.

But the country had yet to assess the impact of Viet Nam's accession to the WTO, a task that required great skill, he said.

With tariffs cut in line with Viet Nam's WTO commitments and a lack of technical barriers, a huge volume of imports have entered the country, causing difficulties for local producers.

The country should therefore adopt measures to safeguard local producers from imports, Lich added. — VNS

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Tuesday’s conference to discuss city’s economic restructuring

HCMC – The impacts of Vietnam’s joining WTO and HCMC’s economic restructuring for the next five years are due to be discussed by economic experts at a conference on Tuesday. 

The “Assessments of the Impacts of Vietnam’s WTO Accession and HCMC Economic Restructuring” conference will delve into issues involving the city’s economic and social development, and proposed appropriate shifts in the economic structure to ensure continued growth.

The roles of government, business and market will also be defined to facilitate the development process.  

The conference is organized by the HCMC Institute for Development Studies, and HCMC WTO Affairs Consultation Center (HCC-WTO), and supported by Beyond WTO Program under a project financed by the Australian Aid Program (AusAID) and UK Department for International Development (DFID).  

The conference takes place at a time when the country is working toward an economic restructuring strategy for the next 10 years and an economic development plan for the next five years.

In addition to Vietnam’s Social Economic Development Strategy (2011 - 2020) and Socio-Economic Development Plan (2011 - 2015), the Ministry of Planning and Investment has drafted a project to boost the country’s economic restructuring to enhance its productivity and competitiveness.

There is a need to make clear Vietnam’s arguments on facts and theories about national economic restructuring, according to a statement of HCMC.  

In the city, a program with different components is being implemented to support the city’s economic restructuring in the five years ending 2010. The city is shifting its economy towards services, industry and agriculture.  

Tu Minh Thien, director of the Investment and Trade Promotion Center of HCMC, said at a recent meeting that the city was focusing on industries such as IT, electronics, mechanical engineering and food processing.

But there is a paradox that labor-intensive industries, including garment and textiles, are making big contributions to the city’s GDP, instead of the key sectors, he said.

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Tuesday’s conference to discuss city’s economic restructuring

HCMC – The impacts of Vietnam’s joining WTO and HCMC’s economic restructuring for the next five years are due to be discussed by economic experts at a conference on Tuesday. 

The “Assessments of the Impacts of Vietnam’s WTO Accession and HCMC Economic Restructuring” conference will delve into issues involving the city’s economic and social development, and proposed appropriate shifts in the economic structure to ensure continued growth.

The roles of government, business and market will also be defined to facilitate the development process.  

The conference is organized by the HCMC Institute for Development Studies, and HCMC WTO Affairs Consultation Center (HCC-WTO), and supported by Beyond WTO Program under a project financed by the Australian Aid Program (AusAID) and UK Department for International Development (DFID).  

The conference takes place at a time when the country is working toward an economic restructuring strategy for the next 10 years and an economic development plan for the next five years.

In addition to Vietnam’s Social Economic Development Strategy (2011 - 2020) and Socio-Economic Development Plan (2011 - 2015), the Ministry of Planning and Investment has drafted a project to boost the country’s economic restructuring to enhance its productivity and competitiveness.

There is a need to make clear Vietnam’s arguments on facts and theories about national economic restructuring, according to a statement of HCMC.  

In the city, a program with different components is being implemented to support the city’s economic restructuring in the five years ending 2010. The city is shifting its economy towards services, industry and agriculture.  

Tu Minh Thien, director of the Investment and Trade Promotion Center of HCMC, said at a recent meeting that the city was focusing on industries such as IT, electronics, mechanical engineering and food processing.

But there is a paradox that labor-intensive industries, including garment and textiles, are making big contributions to the city’s GDP, instead of the key sectors, he said.

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