Economic dynamos identified

The competition assessment report on 10 sectors was last week released by the Ministry of Industry and Trade’s Vietnam Competition Authority (VCA).

Specifically, the five manufacturing sectors consist of steel, cement, chemical fertiliser, milk and animal feed, and the service sectors comprise banking, insurance, petroleum, telecommunication and navigation.

The framework for evaluating the competition was built by the United Kingdom Department for International Development (DFID) and Organisation for Economic Cooperation and Development (OECD).

"The purpose of this research is to assess the degree of competition in 10 specific sectors of the economy in Vietnam. These 10 sectors are all important areas to the economy under perspective of significant contribution to national income, growth rates and directly impact on consumer and social welfare," said Vu Ba Phu, deputy director of VCA.

Phu added that the report also helped businesses be more aware of new business and investment approach and format the new market from the perspective of competition law.

However, according to some economic experts, there are still many issues needed to be clarified in the report.

Le Dang Doanh, senior economic expert, said: “The market economy is creating competitive pressure for business development. Along with the promulgation of the competition law, the competitive situation in Vietnam has made progress in some sectors that allows private companies’ operation, including foreign direct investment businesses”.

Doanh added that at present there were many natural barriers which affected the competition between state-owned enterprises and private enterprises.

“For example, in the petroleum industry, the investment in infrastructure is very large for small- and medium-sized enterprises (SMEs).  If they do not have enough resources to do business, they have to coordinate with big businesses. So, it is needed to clearly separate this business when evaluating competitiveness,” said Doanh.

Tran Dinh Thien, director of Vietnam Economics Institute, said discrimination between the state-owned enterprises and private enterprises was one of reasons affecting Vietnam's competition environment.

“The discrimination is now quite clear when the start-up businesses are very inexperienced. Thus, it is very necessary to give out incentive policies to create conditions for the equitable development. The report should clearly characterised SMEs," said Thien.

“Vietnam is trying to perfect its market structure, so it is somewhat difficult to figure out what perfect market structure will be, in order for SMEs to play equally with big enterprises in the same space,” he aded

Thien said that the country’s competition environment would depend on policies and policy imple mentation  capacity   but  the  report   had   yetindicated   t his. According   to   the   V C A,   the 

report   will   be   broadly   published   after   collecting   recommend ations of   experts .