Eyeing up economic hotspots

This is one of the important activities of the project "Raising capacity for the Vietnam Competition Authority to aim at strengthening market economic institution in  Vietnam" by the Australian Agency for International Development (AusAID), the Department for International Development (DFID) funding through the technical assistance programme “Beyond WTO”.

The areas, divided into either production or service groups, survey a range of industries such as pharmaceutical distribution, life insurance, pay TV, advertising, trucking, washing powder, paper, plant oil, construction glass and marine transportation.

This is the second time the Vietnam Competition Authority proclaimed the competition assessment report on 10 key economic areas. Bach Van Mung, director of the Vietnam Competition Authority, said that in five production sectors, there were a few number of newly enterprises participating in the market, even the number lowered in some sectors such as paper and construction glass due to some matters on Vietnam's policies.

The report showed that the main barrier for these five sectors was the high import tax applied for input materials and products which reduced competitions of produced products compared with imported ones. Meanwhile, for other services sectors, the number of enterprises entering the market was quite large and continuously increased.

However, Mung said, in the five sectors, the market leaders belonged to the foreign-invested enterprises, which showed that in the non-life insurance market, the foreign ones took the top, while Bao Viet was the unique Vietnamese firm.

The similar situation occurred in marine transportation and advertising, where the top market leaders are foreign-invested ones or member companies under the big groups.

"In these two sectors, most of Vietnamese enterprises are subcontractors for foreign invested-enterprises because their financial capacity, human resources, management level and experience do not meet the requirement of customers," said Mung.

This report means to assess the competitive scenario in 10 sectors from the angle of competition policy and law, as well as other criteria, which are being used to evaluate the level of competition in developing countries by international organisations.

Accordingly, the report assesses the market scale, barriers to market entry and exit, market structure and the real state of competitive activities in the market. On that basis, it indentifies signs of anti-competitive practices, which might possibly appear in the relevant market in the sector under evaluation.

The report was prepared to help state agencies, domestic and foreign investors, donors and international organisations as well as businesses working in the market, to revise sectoral regulatory policies, improve the supervision of competition and develop business strategies or decisions.