Jury out on how to drive clusters

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Nguyen Van Tuan, director of Thong Tan Foodstuff Company, said that it was necessary of cluster development, but suggested that government’s role in supporting the approach has caused difficulties.

“We are exporters and we still associate with other suppliers. However, it was hard to control quality of material suppliers and is doubtful whether government takes part in this or not,” Tuan said.

In recent years, “cluster strategies” have become a popular economic development approach among state and local policymakers and economic development practitioners. An industry cluster is a group of firms, and related economic actors and institutions, that are located near one another and that draw productive advantage from their mutual proximity and connections. Cluster analysis can help diagnose a region’s economic strengths and challenges and identify realistic ways to shape the region’s economic future

One outstanding company in developing cluster, Ecolink Company, found itself in an awkward situation due to overlapping governmental jurisdictions.

Under regulation on product and goods quality issued 2007, the Ministry of Agriculture and Rural Development took responsibility for initial production process. But the Ministry of Health took responsibility for regulations regarding food safety issued in 2010. Based on differing products, the oversight was divided among three ministries of Agriculture and Rural Development, Health and Industry and Trade based on products,

Than Di Ngu, director of Ecolink Company, said that if there are no clearly responsibilities of state managements, it was hard to implement the strategies.

Noriyuki Yonemura, JEF secretary general, said that Japan has used industry strategies as an important tool of its government to develop the sector, adding that experiences gained during its industrialisation can help Vietnam boost its own process.

The strategy was expected to come online in the third quarter of this year, but remained under review, collecting comments, according to a source.

Under the strategy six potential sectors were identified including household electricity, food processing, shipbuilding, farm machinery, energy savings and automobile manufacturing. .

He stressed that under Vietnam’s ASEAN Free Trade Area commitments, it must cut tariffs in 2018. If Vietnam focuses on labour intensive industries, foreign investors could move into other countries.