Posted date: 18/02/11

VietNamNet Bridge – Vietnam takes pride as a country with a rapid export growth rate and the main exporter of many key products. However, experts have pointed out that despite the high export growth rate, the effects remain relatively low.

 

Though Vietnam has a number of rice exporters higher by ten times than that of Thailand, it has been far inferior to Thailand in rice exports.

In coffee cultivation, Vietnamese farmers have followed the “small farming” model, i.e every household has its own coffee growing land plot. The backward farming habit of picking up ripened coffee beans together with unripe beans because farmers fear coffee beans may be stolen, and backward processing technology both have led to the low quality of products. As a result, 80 percent of the refused coffee in the world has reportedly come from Vietnam.

Every year, Vietnam only exports over one 100,000 tons of tea, while there are up to 600 production and trade enterprises, and other thousands of household businesses. These include nearly 200 enterprises which directly export products. In 2009, the average price of tea in the world was $2.43 per kilogram, while Vietnam could only sell at $1.23 per kilo, which was far below the world’s price. The tea price in the world has increased by 18 percent since 1998, while Vietnam’s tea export price has decreased by 20 percent.

Being a leading cashew nut producer and exporter in the world, but Vietnam has been always inferior to India in terms of processing capabilities. Vietnam’s production cost remains very high, while the main works are still being done manually.

Regarding industrially processed products, as the input material prices have been increasing, the export turnover has been increasing, but the sum of money Vietnamese exporters can pocket have been decreasing due to the higher production costs.

While garment is considered the biggest export for Vietnam and the country is listed in the world’s top five in export turnover, the income of Vietnamese garment workers is among the lowest in the world. Handicrafts producers are now also busy with the orders of doing outsourced jobs for foreign partners. As a result, they can only pocket small sums of money, while the biggest added value falls into the hands of foreign partners.

Vietnam has tried to develop seafood processing workshops, but the workshops have always been short of materials. Meanwhile, imported materials are subject to high tariffs. As a result, many seafood processing workshops are running at a moderate level, at less than 60 percent of the designed capacity.

The key problem behind the current situation is the scatter in production and export. There are too many entities in the same fields, leading to the fact that entities scramble for purchasing materials, thus pushing the prices up. As there are too many exporters, the exporters try to scramble for clients, thus forcing the export prices down.

A lot of proposals and solutions have been suggested, and they sound perfect. However, the solutions remain on paper, because it remains unclear who will implement the solutions, when to implement the solutions and what needs to be done.

Vietnam has decided to develop supporting industries, i.e develop the factories that can make parts and accessories to provide to big manufacturers. However, analysts say that Vietnam does not have the strength to develop supporting industries. Vietnam has been calling for foreign investment to develop supporting industries. However, foreign investors have been keeping a deaf ear on the call. Many of investors believe that it would be better to bring products to Vietnam to sell here, which will allow them to rapidly earn back their investment capital.

Vietnam has put high expectations on global economic integration, with which, export markets in the world will be opened more widely for Vietnamese goods. However, Vietnamese exporters have been struggling to deal with the technical barriers installed by importing countries. Meanwhile, the complicated procedures puts a heavy burden on businesses, as businesses have to “go through many doors” and pay several expenses, which makes production costs higher.

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