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Vietnam’s Post-WTO Industrial Development: Strategies and Realities

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Southeast Asia beyond Crises and Traps

Part of the book series: Studies in Economic Transition ((SET))

Abstract

This chapter examines the progress of Vietnam’s industrial development, which is vital for the country’s sustained economic growth. The analysis of the manufacturing sector as a whole and firm-level case studies find a stark gap between strategies and realities. Despite varieties of policy interventions made, actual transformation of industries has been driven largely by market forces. This market-led mechanism has worked relatively well in developing labour-intensive industries. However, Vietnam’s endeavours toward the next stage of industrial development likely require a more targeted approach for channelling available resources and coordinating different players. To this end, Vietnam should make effective use of international economic integration to deal with key obstacles to reforms, which are deeply embedded in its political economy structure.

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Notes

  1. 1.

    See, for example, Perkins and Vu Thanh Tu Anh (2010) and Vu Thanh Tu Anh (2014).

  2. 2.

    A typical example is Resolution 34/NQ-TW of the Ninth Plenum of the Ninth Party Central Committee on 3 February 2004.

  3. 3.

    The number of laws (including revisions) adopted by NA increased as negotiation accelerated: 13 in 2004, 29 in 2005, and 22 in 2006. Monitoring of the law-making process by negotiation partners is illustrated by an incident during the fall NA session in 2005. American, Australian, and European Chambers of Commerce sent letters to the NA requesting it not to pass the draft Investment Law under discussion because its content would have a negative effect on the investment and economic environment (tuoi tre, 29 November, 2005, http://tuoitre.vn/tin/kinh-te/20051027/de-nghi-khong-thong-qua-luat-dau-tu-tai-ky-hop-qh-lan-nay/105058.html, accessed 1 May 2015).

  4. 4.

    Vu Thanh Tu Anh (2014) argues that fears of the impact of WTO on domestic industries became the basis for building consensus on the establishment of SEGs.

  5. 5.

    By 2014, three of them were converted back to GCs, including Vinashin.

  6. 6.

    Serious financial problems and mismanagement were also revealed for Vietnam National Shipping Lines (Vinalines) and Electricity of Vietnam (EVN).

  7. 7.

    Prime Minister’s Decision 929/QD-TTg dated 17 July 2012 approves the scheme on restructuring SOEs with a focus on SEGs and GCs for 2011–15.

  8. 8.

    Generous tax incentives were granted for Samsung’s first plant in Bac Ninh and to Nokia and Bosch (Ngoc Linh 2013) and to Samsung’s second plant in Thai Nguyen (Viet Nam News, 12 December 2014, http://vietnamnews.vn/economy/263948/thai-nguyen-approves-incentives-for-samsung.html, accessed 28 April 2015).

  9. 9.

    Prime Minister’s Decision 879/QD-TTg dated 9 June 2014 included T&G and mechanical industries among priority industries.

  10. 10.

    Such GCs required at least seven members and a legal capital of at least 1,000 billion VND.

  11. 11.

    Government Decree 55-CP dated 6 September 1995.

  12. 12.

    Equitisation of Vinatex had been planned since 2006 but was substantially delayed.

  13. 13.

    Itochu Corporation, a Japanese trading company and Vinatex’s long-term business partner, also acquired 5 per cent shares but not as a strategic investor.

  14. 14.

    The three companies are Viet Tien Garment Company, Nha Be Garment Company, and Phong Phu Textile Company.

  15. 15.

    Prime Minister’s Decision 55/2001/QD-TTg dated 23 April 2001 approving the development strategy for the T&G industry toward the year 2010.

  16. 16.

    Prime Minister’s Decision 36/2008/QD-TTg dated 14 March 2008 approving the development strategy for the T&G industry toward the year 2015 and Decision of the Minister of Trade and Industry 3218/QD-BCT dated 11 April 2014 approving masterplan for the development of the T&G industry toward 2020.

  17. 17.

    Such GCs required at least five members and legal capital of at least 100 billion VND.

  18. 18.

    The discussion in this paragraph is based on Interview 1.

  19. 19.

    Suzuki also established a joint venture with a VEAM member, Southern Agricultural Machinery Company (Vikyno).

  20. 20.

    Prime Minister’s Decision 10/2009/QD-TTg dated 16 January 2009 regarding the mechanisms to assist the development of production of key mechanical products from 2009 to 2015.

  21. 21.

    Vietnam Association of Mechanical Industry (VAMI) established the Automobile Board, consisting of eight state-owned and private manufacturers of buses and trucks and headed by the general director of VEAM (http://www.vami.com.vn/vi/vami-thanh-lap-ban-o-to-vami-828.html, accessed 1 May 2015). Upon its establishment in November 2014, the board submitted a series of petitions to the government including a request to maintain the ceiling of import tariffs on assembled vehicles (Le Hoang 2014).

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List of Newspapers

List of Interviews

  • 1: Senior Advisor, VEAM, on 26 August 2002.

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  • 2: Vice Chairman and Vice General Director, VEAM, on 13 January 2010.

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  • 3: General Director, Company A, on 11 September 2008.

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  • 4: Deputy General Director, Company B, on 16 September 2008.

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  • 5: Deputy General Director, Company C, on 16 September 2008.

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  • 6: Manager of Engineering Department, Company C, on 21 November 2008.

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Authors and Affiliations

  1. Institute of Developing Economies, Chiba, Japan

    Mai Fujita

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  1. Mai Fujita
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Correspondence to Mai Fujita .

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Editors and Affiliations

  1. National Graduate Institute for Policy Studies, Tokyo, Japan

    Boo Teik Khoo

  2. National Graduate Institute for Policy Studies, Tokyo, Japan

    Keiichi Tsunekawa

  3. National Graduate Institute for Policy Studies, Tokyo, Japan

    Motoko Kawano

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Fujita, M. (2017). Vietnam’s Post-WTO Industrial Development: Strategies and Realities. In: Khoo, B., Tsunekawa, K., Kawano, M. (eds) Southeast Asia beyond Crises and Traps. Studies in Economic Transition. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-55038-1_4

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  • DOI: https://doi.org/10.1007/978-3-319-55038-1_4

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