What Should the Government of Vietnam Do to Promote Its Exports?

What Should the Government of Vietnam Do To Promote Its Exports?

Macroeconomics students learn by heart the equation:

Y= C + I + G + NX

Where: Y denotes GDP; C, I, G, NX represent consumption, investment, government purchases and net exports respectively. It can be inferred from the equation that if we can boost exports (‘spending on domestically produced goods by foreigners’), we can raise GDP and people’s living standard. Wishing this to happen in Vietnam, what should its Government do?

Vietnam’s exports, though having achieved some success, is facing challenges: our economy, as well as our firms, is not very competitive; many businesses do not involve themselves in export strategies and play a passive role in changes in the world market and technology barriers like hygiene and food safety; trade associations are not taking effective actions, etc. Besides, Vietnam’s exports does not depend only on its Government but a number of other factors such as the world’s general situation, foreigners’ purchasing power and our businesses. Still the Government of Vietnam can promote exports with money, policies and specific actions. This paper brings up four main measures that are judged to be most important.

In the first place, the Government ought to make export firms heartened by giving them priority in borrowing funds for production and investment, putting into action a reward regime which is based on export turn-over of encouraged goods like rice, coffee, peppercorn, fresh and dehydrated vegetable, marine products, pottery, china, fine handicrafts, garments, etc.

In the second place, a good way to promote exports is that the Government, with its great weight, sets information-seeking and forecasting as a crucial task. It needs to cooperate with functional organs and trade associations to search for information on products, supply and demand, technology barriers, procedures and trade policies in the world market; and then stay to be firms’ reliable predictor. This minimizes the situation in which we lost thousands and millions of US dollars only because lack of information on rice price (9/2002, 2004) shrimp price (7/2003), cashew price (10/2004).

Something that makes businesses greatly disquieted is complicated customs formalities. These should be simplified because they apparently hinder exports.

Another affair that needs the hand of the Government is expediting trade. The Government may make plans for international fairs in Vietnam, assist head offices to set up commercial centers overseas, offer financial aids to firms that join international exhibitions