Existing and future free trade agreements are expected to promote innovations in the business community to enable firms to compete not only at home, but also on international markets.

According to Tran Du Lich, member of the National Assembly's Economic Committee, success in the market will be determined by restructuring and creativity, rather than scale.

Lich said that businesses need to operate in a climate in which innovations were encouraged and the State played a role in ensuring the market remains operating on the right track.

Vietnam, having great opportunities to increase its economic growth in the coming decades, will help Southeast Asia expand the industrialization process and avoid risks of lower middle income traps, Lich said.

Photo for illustration: tapchitaichinh.vn

Competition is anticipated to become fiercer, not only at home but on international markets, and firms’ improving their competitiveness was called critical to being able to take advantage of opportunities.

However, Lich pointed out that the competitiveness of Vietnamese businesses remained low, especially in high-tech industries, capital-intensive sectors and high-end services.

There are some 550,000 existing firms in Vietnam, but only one-fourth of them were capable of exporting, he said, adding that there was also a lack of stability in the quality of their products.

Other problems included high input costs, infrastructure inadequacies, and loose links in the production chain.

It is now time for Vietnamese businesses to restructure and to mature, according to Lich.

He noted that bad debt, public debt and institutional reforms, in addition to strengthening local markets, must be thoroughly tackled.

Faster than ever

Vietnam is integrating more rapidly than any other ASEAN country, except Singapore, according to Vo Tri Thanh, Deputy Director of the Centre Institute of Economic Management.

He also believes that the Vietnamese economy will enter a new thriving period, marked by its participation in the Trans-Pacific Partnership.

He urged Vietnamese to study new-generation FTAs carefully to understand rules of origin and meet technical norms to allow for participation in these markets.

Thanh further predicted that there would be a boom in the consumption and service industries to benefit end-users.

Thanh also said, at a conference held by the Vietnam Association of Consumer Goods on February 19 that creation of a 400-page economic strategy report, entitled 2035, would be officially announced this week.

Source: VNA