REVIEW
of
FINANCE -
Apr. 2018
5
based mainly on the recovery of the world
economy, especially the strong recovery of
traditional markets.
However, the focusonexploitingsomemarkets
would pose questions about the sustainability
of growth, as well as the ability to diversify the
export market of Vietnam. Moreover, export
growth is now largely depending on the FDI
sector (accounting for over 70% of total exports).
The domestic added value of exports was also
very low, especially in important export sectors
such as agricultural products, seafood, electronic
devices and hi-tech electronics.
Despite of having the opportunity to
participate more deeply in the global value
chain via free trade agreements, Vietnam still
produces low-tech, low value added and less
competitive products. Thus, to benefit more from
the supply chain of exports, Vietnam should
improve the link between domestic enterprises
and FDI enterprises. Accordingly, domestic
enterprises will have to make great efforts to
improve and demonstrate their competences,
instead of waiting for FDI enterprises’ guarantee
of exporting their products.
Directions to improve growth potentials
Vietnam has entered 2018 with optimism
and cautious. The lessons from 2016 and 2017
showed the need to be consistent with the goal
of stabilizing macro economy. Economic growth
has been critical, requiring reforms that have
come in essence,
s t i m u l a t i n g
en t r ep r eneu r i a l
s p i r i t
i n
a
friendly business
e n v i r o n m e n t ,
t oge t he r
wi t h
a cons t ruc t i ve
and transparent
g o v e r n m e n t .
Specifically:
Firstly,
it is
n e c e s s a r y
t o
c o n s i s t e n t l y
impl ement the
reform of the
growth mode l .
in line with the policy expectations as well as
the incentives for this sector. Although some
efforts have been made to attract a number of
high-tech enterprises, Vietnam has not met the
target of upgrading technology and transferring
technology through FDI enterprises.
Secondly,
the transfer pricing of FDI
enterprises has become increasingly more and
more complex, imposing many challenges for
state budget management and collection.
Thirdly,
the spillover effects of FDI have not
been so great. In particular, the key problem was
that the linkages between FDI enterprises and
the local business community, especially small
and medium enterprises, were relatively weak.
Contribution of exports to economic growth
Import-export growth in the 2016-2017 period
was a bright spot in the economy. For example,
in 2017, Vietnam’s total import and export value
reached nearly USD 424.87 billion, equivalent
to an increase of 20.9% compared to the value
in 2016; Of this amount, total export value
reached USD 213.77 billion, equivalent to an
increase of 21.1% and total import value reached
USD 211.1 billion, equivalent to an increase of
20.8%. Although import and export growth
is recovering rapidly, it is not the same as the
growth the 2007-2008 period, the time before the
global financial crisis and the global economic
recession.
The survey showed that export growth was
Agriculture, Forestry and Fishery
Industry & Construction
Services
FIGURE 3. GDP GROWTH BY AREAS IN THE PERIOD OF 2018-2017 (%)
Source: General Statistics Office
