Integration policy hitting port, but the road is only beginning

What is your view on Vietnam’s current advances in international integration?

One of the distinguishing features of Vietnam over the last 25 years has been the very active process of integration into the global and regional economy, which has been reflected in gaining memberships in all kinds of institutions, such as the WTO, and active negotiations in pursuing a large number of FTAs.

Vietnam has been an active and committed participant in these institutions. Under Vietnam’s chairmanship of the ASEAN and the East Asia Summit, the Summit was extended to include the US and Russia, which was a major and important piece of global politics reflecting Vietnam’s constructive approach to participating in these organisations as well as its aim to contribute to the further development of regional and global international norms [expected and acceptable behavioural patterns based on the rules of the international system.

Not all countries do this and Vietnam has been an outstanding global citizen in terms of being an active and constructive contributor.

What competitive advantages does Vietnam possess to further the international integration process?

In an economic sense, the answer depends very much on the individual sectors that Vietnam has. For instance, Vietnam has a very large mineral endowment, which the country could utilise to bring far more wealth and benefit for its people. However, for a variety of different reasons, this is only happening off-shore.

It is also a similar story with other sectors like agriculture where Vietnam is a major global playact in terms of volume but not of value.

In the broader political economic sense, Vietnam brings a very strong and consistent desire to integrate and become a constructive member of the international society, so it is the spirit of co-operation, of being part of the team, of building and developing new rules from which Vietnam can also profit.

On another note, what do you think are the best ways to take advantage of the international integration process?

A way in which Vietnam could greatly benefit from the process is by strengthening its institutions, encourage harder competition and productivity.

Another way, I suppose, is that all countries must take a hard look at their balance of regulations to see what incentives are available to attract long-term investment. That is a hard job in politics. Lots of countries have experienced this, and it could be Australia among them that could share such experiences with Vietnam.

As for agriculture, clearly, Vietnam has a very strong agricultural background, but very much at the low-end of the value chain. There are all sorts of techniques counting from seed technology to post-harvest technology which can improve the value added by the sector.

How can local small and medium enterprises (SMEs) make use of the integration process to enhance their business and competitiveness?

I think the key to enhancing SMEs is for the government to give them more space. The problem with the SMEs is that they occupy too much of the capital and produce too little of the output. Thus, SMEs find it hard to access capital and to get things done.

We see the next phase of Vietnamese development is to liberate the private sector, to let private capital work effectively on what it does and what it could do, within the proper settings.

Vietnam needs to get better regulations and institutions, better credit management, more financial and state-owned enterprise (SOE) reforms, as these factors will enable SMEs to gain space to do business.