Industrial Policy Symposium

Supporting Industry Action Plan

On 05-09-2008, JETRO and VCCI co-organized the first national seminar on action plan for supporting industry development. Its purpose was to launch the work of designing concrete action plans for supporting industry promotion, which would implement the SI master plan approved in 2007 through bilateral cooperation between Vietnam and Japan.

Following the seminar, it is proposed that joint working groups be established to draft action plans in different areas, to be finalized by early 2009.

Vietnam Development Forum (VDF) plays the role as a supporter and provider of academic inputs and other assistance.

Key documents and slides

- Vietnamese Supporting Industries: From Master Plan to Action Plan through Vietnam-Japan Monozukuri Partnership, Kenichi Ohno, Research Director of VDF. English (PDF427KB), Japanese (PDF609KB), Vietnamese (PDF912KB)

Conference and seminar summary

The First National Seminar on "Action Plan for Development of Supporting Industry in Vietnam", Sep. 5, 2008 at VCCI.

Prof. Kenichi Ohno
(Co-Director, VDF)

From left: Dr. Vu Tien Loc (Chairman of VCCI), Mr. Vu Huy Hoang (Minister of MOIT), and H.E. Mr. Mitsuo Sakaba (Ambassador of Japan)

Mr. Nobuhiko Murakami
(General Director, TMV)

Presenters and Discussants
Vu Huy Hoang	Minister of Industry and Trade (MOIT)
Kenichi Ohno	Co-Director, Vietnam Development Forum (VDF)
Nobuhiko Murakami	General Director, Toyota Motor Vietnam (TMV)
Hoang Ngoc Vinh	General Director, Ministry of Education and Training (MOET)
Ha Duyen Tu	Vice Rector, Hanoi University of Technology (HUT)
Ha Xuan Quang	Vice Rector, Hanoi University of Industry (HUI)
Duong Duc Lan	Deputy Director, Vocational Training General Department
Takao Fujii	VN-JP Human Resources Cooperation Center (VJCC) Ho Chi Minh
Nguyen Noi	Ministry of Planning and Investment (MPI)
Nguyen Van Toan	Association of FDI Enterprises in Vietnam
Dao Phan Long	Vietnam Association of Mechanical Industry
Kyoshiro Ichikawa	JICA Expert
Takashi Takahashi	Honda Vietnam
Nguyen Trong Hieu	Agency for SME Development (ASMED), MPI
Do Thi Loat	Ministry of Finance
Tran Van Tan	State Bank of Vietnam
Manabu Tsurutani	JBIC Expert
Noriyuki Yonemura	Chairman, Japan SME management Consultants Assn. (J-SMECA)

Some Highlights

Kenichi Ohno -- Vietnam - Japan Monozukuri Partnership

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Vietnam-Japan monozukuri partnership should be created for leveling up Vietnam's competitiveness in the age of deepening integration.

Purpose -- Implement Supporting Industry Master Plan (approved July 2007) through concrete action plan.

Method -- Japan transfers skills and technology for monozukuri; Vietnam absorbs them with determination.

Reciprocity -- Two countries share the burden and benefits as equal partners (not one-way aid).

Time scope -- Short-term (2009), medium-term (2013) and long-term (2020); intensive efforts should be made to produce initial tangible results.

Nobuhiko Murakami -- Three issues of competitiveness

Three competitiveness issues need to be considered seriously: (i) completion of AFTA liberalization process; (ii) rapid hike of wages and other costs; and (iii) weakness of supporting industries in Vietnam. To solve these issues, the industrial joint working team in Vietnam-Japan Joint Initiative has to specify sectors, parts and processes in supporting industries that are expected to be supplied by local/FDI companies and need to be given priorities.

Discussion group 1 -- Capacity building and HRD

Industrial human resource has met with critical issues: (i) college/university graduates do not meet enterprises' requirements; (ii) weak creativeness and application of employees; and (iii) lack of leadership and teamwork spirit. To overcome these weaknesses, Japanese side proposes to apply shindanshi system and establish Vietnam's monozukuri school/university for upgrading management ability as well as developing human resource for SME and supporting industries.

Discussion group 2 - FDI - local linkage

FDI and local suppliers are key players in supporting industries. To promote these industries, attracting FDI suppliers in parallel with leveling up local capacity must be reinforced. Attractive investment environment, incentives, and supporting industry cluster are essential for the former, while the latter needs a fair competition environment, government supports for technology transfer, capacity building and FDI linkage programs.

Discussion group 3 - Financing for SI

Financing issue is always an obstacle of enterprises operating in supporting industries. Bank/financial institutions are usually not enthusiastic in providing loans to SME due to their weak capability in project appraisal/risk management. Credit guarantee fund and credit organizations exist in Vietnam but their capacity does not yet meet the expectation of enterprises. Some countermeasures are proposed by Japanese experts, such as capacity building for credit institutions, effective use of two-step loans, preferential credits, and combination between credit guarantee programs and the enterprise evaluator (shindanshi) system.