Conference discusses the possibility of Vietnam becoming a global center for processing and manufacturing.
The State Bank of Vietnam (SBV) cooperated with the Vietnam Fatherland Front (VFF) and the World Bank to hold a conference entitled “Vietnam as a New Processing and Manufacturing Center of the World after 2015”.
In his opening remarks, Chairman of the Central Committee of the VFF, Mr. Nguyen Thien Nhan, said that Vietnam has recorded many achievements after 30 years of the “doi moi” (renovation) process. In 25 years GDP has increased 30-fold and export value by the same in the 30-year period, resulting in the country reaching middle-income status. A new phase of development is now beginning, with the government discussing plans for the 2016-2020 period and to 2030.
In recent years many international organizations have said that Vietnam could become a processing and manufacturing center of the world after 2015. “We must therefore clarify what Vietnam currently has and whether it can adapt to being a processing and manufacturing center,” Mr. Nhan said. “Sixty-three per cent of our export volume is in processing and manufacturing and 56 per cent of foreign investment is in the sector.”
He also said that Vietnam still holds advantages in low labor costs but it must be determined how long this advantage will last.
According to World Bank Country Director for Vietnam, Ms. Victoria Kwakwa, Vietnam has the opportunity to become a processing and manufacturing center of the world. In ten years about $90 billion will be invested into the field and the sector now accounts for 80 per cent of total export turnover. However, its ratio of smart phone and electrical component exports is much smaller than in regional countries such as China, Thailand, and Indonesia. Vietnam will continue to have an advantage in growth, she said, thanks to its convenient location and its large, low cost workforce. It is also opening up to trade and integration, and has huge market potential and a growing middle class.
SBV Governor Nguyen Van Binh told the conference that processing and manufacturing is a key sector in economic growth. If the country is to be a new center for the sector in the next 20 years it needs to identify trends, capacity, and resources and propose a comprehensive solution for synchronized economic development.