Business growth falls short of mark

At the monthly meeting chaired by the MPI earlier last week and attended by officials from ministries, agencies and local authorities, sources revealed that despite positive growth in most sectors this month, they still faced considerable individual challenges when it came to realising 2005 economic targets.
The tourism sector was one bright spot on this month’s overall economic picture thanks to the 310,000 international visitors in July, lifting Vietnam’s foreign tourist influx for the first seven months of the year to two million, a year-on-year increase of 23 per cent.
Given the growth speed, the tourism sector is sure to fulfil this year’s target of welcoming 3.1 million foreign visitors, said a representative from the National Administration of Tourism (NAT).
He also pointed out that the sector had not fully tapped its potential, failing to perform against regional competitors in the wake of the terrorist attacks and the tsunami.
“We have been enjoying very strong advantages against other nations in terms of security, peace and our own characteristic beauty. But tourism promotion remains underdeveloped,” said the NAT representative.
“I think the key obstacle is that there hasn’t yet been a coordination good enough between different sectors and between different local authorities in grasping these development opportunities,” he added.
Calls were additionally made by the representative for the transportation sector to coordinate with the tourism sector in providing better services for tourists.
During the meeting, export turnover was also assessed and it was determined that it would most likely realise this year’s financial target.
Figures for July revealed an export turnover of $2.75 billion, an increase of 4.3 per cent against last month’s number.
A representative from the Ministry of Trade warned that a host of unpredictable changes in the export market, combined with the manufacturing sectors’ unresolved problems risked additional harm to the area’s bright future.
Truong Van Cam, a Vinatex representative said that textile and garments, one of the country’s key exports, were displaying poor levels after recording a year-on-year increase of only 0.1 per cent in export value.
“The textile and garment sector has never faced such difficulties for the past five years. We nearly achieved no growth in export during this month,” said Cam.
Cam attributed this weak performance to lack of coordination between manufacturers, and their limited production capacity, which he also blamed for the reduction in textile exports to the EU.
“Unlike other importers, EU partners often demand from Vietnamese textile exporters huge orders of very high-quality products,” he said.
“But our textile manufacturers, whose productivity remains low, tend to choose small and single orders from other importers,” he added.
Officials attending the meeting expressed concerns over the ineffective development of state industries under local management, with a year-on-year increase of only 0.9 per cent in production value for the first seven months.
There was additionally a considerable decrease in the growth of state-owned industries in several regions compared to the same period of the previous year, with Vinh Phuc recording a 76 per cent reduction, Quang Ninh 23.3 per cent, Haiphong 15.5 per cent, and Ha Tay 8.3 per cent.
This decline resulted from the equitisation of state-owned industries after they shifted industrial production value to the non-state owned sector, explained the local authorities.
MPI vice minister Cao Viet Sinh, disagreed saying that it could not be the main reason for the decline as there had been neither a remarkable climb or growth of non-state owned industries in these regions.
“I don’t see any sharply increased growth in non-state owned industries in the locations [mentioned above],” said Sinh.
“I think issues relating to local poor management should be taken into account as the key factors causing this reduction,” he said.
The vice-minister urged ministries, agencies and local authorities to work more closely with one other in addressing the obstacles and reaching this year’s target.