Industrial Policy Symposium

To mark VDF's First Anniversary

Prof. Phong makes a statement, three speakers are listening.

The Vietnam Development Forum became one year old in February 2005. In our first year, we were very busy building research networks on such topics as industry, trade, social security, street children, environment, aid policy, macroeconomy, etc. with a large number of people and organizations inside and outside Vietnam. We organized four research missions to HCMC, Japan and Thailand; held 44 workshops and about 100 research meetings in Hanoi and Tokyo; published two books, five discussion papers, one policy note and one joint report with ADB; participated in international conferences and programs, and hosted two rounds of research competition with 10 winners. VDF is part of the 21st Century Center of Excellence Program funded by Japan's Ministry of Education, Culture, Sports, Science and Technology (MEXT).

To mark our first anniversary, VDF hosted a symposium on industrial strategy formulation, a topic crucial to VDF, in Hanoi on March 24, 2005. It was opened by Prof. Nguyen Van Thuong (VDF/NEU Rector). H.E. Hoang Trung Hai (Minister of Industry) gave the first presentation raising three key issues, followed by a presentation by Prof. Kenichi Ohno (VDF/GRIPS) which compared policy making methodology between Thailand and Vietnam. Subsequently, there was a lively discussion.

From left to right: Prof. Thuong, Minister Hai, Prof. Ohno

Minister's remark (PDF261KB) Prof. Ohno's presentation V (PDF530KB) Prof. Ohno's presentation E (PDF288KB)

Some Highlights

Three issues are offered for consideration: (1) how to evaluate the current performance of Vietnam's industrialization--quantitative growth is impressive but modernization and technical depth lag behind; (2) industrial strategy up to 2020 under globalization--policy methodology, criteria of becoming an industrial country, Vietnam's positioning in the global and regional economy, strategic thinking, etc. must be clarified; and (3) choice of leading industries--MOI has three classification of competitive advantage industries, fundamental industries and potential industries. When choosing leading industries, dynamic comparative advantage must be analyzed.
 

VDF and MOI organized a joint mission to Thailand in early March 2005. Thailand has experienced four decades of FDI-led  industrialization and created substantial agglomeration in automobile and electronics. Under the current strong Thaksin administration, industry-specific committees and institutes are set up as key instruments for designing, implementing and adjusting master plans. Private producers are active and they, not the government, propose numerical targets in the master plan. Vietnam can study Thai lessons in national positioning, strategic marketing, private-sector channels, and master plan contents and methodology. But Thailand also has the serious problems of slow technology absorption and weak human resources (engineers and managers). Vietnam should plan to overcome these problems from the early stage of industrialization.
 

I have worked six years in Vietnam. We like Vietnam very much, but as a business enterprise we must make a choice among many potential host countries. Matsushita has 48 factories in China, 15 in Malaysia, 10 in Thailand but only 2 in Vietnam. I want to promote Vietnam as an FDI host country but the business environment is not yet attractive. Let me give some examples: (1) import duties are often suddenly changed without prior consultation; (2) part tariffs from non-ASEAN countries are still high; and (3) for some products, the responsible ministry is not clear (electronic home appliances are torn between MOI and MPT).
 

Vietnam's achievement in the last 15 years has been good, but we face new challenges. I agree with the Minister that new methodology and theory to guide our policy making is needed. We also need to create proper criteria for becoming "an industrialized country" by 2020. It must be based on modern technology with a strong service sector. The structures of GDP, labor and population should be considered. It is also necessary to focus on the education level of the labor force. Science and technology, "level playing field" for all sectors, high-tech and labor-intensive industries, and supporting industries must be emphasized.
 

 

VDF's Book on Industrialization Strategy

Since the establishment of VDF in Feb. 2004, industrial policy has always been our major interest and concern. We have conducted many visits, workshops and policy discussions on various aspects of Vietnam's industrial strategy in the context of regional competition and accelerating integration. We are pleased to bring the highlights of our first year's research in a book form.

All chapters are downloadable in two languages, English and Vietnamese (click the images below to go to the book webpage). These soft copies are final drafts submitted to the publisher. The published book differs slightly from them due to minor revisions and reformatting. However, the main contents remain unchanged. For hardcopies, please contact VDF.