Why does Vietnam
pursue the goal of becoming a country with modern industries, while it can
develop using other advantages? The question was raised by Nguyen Duy Nghia, a
reader of VietNamNet’s Vietnam
Economic Forum.

Below is
Nghia’s article. The author believes that in order to follow an
industrialization process, Vietnam
should use its comparative advantages. For example, by persuading the world to
buy rice, eat fish and drink Vietnamese coffee, use seaport services in Vietnam and travel  to Vietnam.

Mission impossible

In the
1960s, in an effort to industrialize, Vietnam
with the support of the Soviet Union, built a large mechanical engineering
factory in Hanoi.
After that, with the support from China,
it built the Hong Ha office supply factory, also in Hanoi.

Following
this, factories and workshops mushroomed in other provinces and cities,
especially mechanical engineering factories,. However, these failed to advance Vietnam’s
economy.

Beginning
in 1990, Vietnam
designed 10-year plans for industrialization and modernization, first
for1991-2000 and then 2001-2010. Over the past 20 years, Vietnam
achieved a lot in terms of economic development, but it has still not
industrialised.

Vietnam’s heavy industry is mainly based on
raw materials exploitation, preliminarily treatment of  exploited ores, or assembling machines using
simple  technologies. Precise technology
remains luxurious for Vietnam.
The Hoa Lac High-tech zone has been completed for a long time, but to date it
has not attracted high-tech firms. The plan on developing supporting industries
is still not being implemented. Vietnam
still has to import many goods from razors to press studs. The country is
determined to become a powerful shipbuilder, but it still has to import the
necessary equipment, including soldering sticks.

after many
years, Vietnam
still relies on imports. It has to import production lines, separated machines,
spare parts, raw materials and technology. However, even with imported
technologies, Vietnamese consumers are still not persudaded by the quality of
the domestically made products High income earners do not want to use products
made domestically, from non-stick pans to luxurious cars.

Still going ahead?

Vietnam needs five factors to successfully
industrialize: big capital, profuse electric power, developed infrastructure,
high technology level and good labour force. However, it seems that all these
five areas remain problematic.

1. The
capital for development remains small. Vietnam’s state budget has been
relying on import-export tax and crude oil exports. Meanwhile, expenditures are
always high and urgent. By the end of 2010, Government’s debts may reach 44.5
percent of GDP, the national foreign debts 42.2 percent of GDP, and public
debts 56.7 percent

Vietnam is a poor country, but the  wealth of individual people is profuse. Some
can spend billions dong on car plates with auspicious numbers. However, their
money does not contribute to the country’s industrial development. They inject
money into stocks and real estate market or deposit it at banks.

Vietnam’s productivity is low, $2000 per head, equal to just
½ of that of the Philippines
or Indonesia, 1/3 of Thailand, 1/10 of Malaysia,
1/30 of Singapore.
Over the past 20 years, foreign investors made a lot of promises, but they have
donelittle . In 1991-2000, the registered foreign direct investment capital was
$43.9 billion, but the implemented capital was $19 billion only, or 43 percent.

2. Vietnam has
been exporting coal, while the country itself needs coal to run power plants. Vietnam still
cannot meet its own  demand for
electricity.

3. The
traffic density per 1000 people in Vietnam is much lower than in other
countries, but the quality is bad. Traffic jams remain an unsettled problem

4. Experts
believe that Vietnam’s current technology level are just equal to that of China
in the 1980s, of Malaysia in the 1970s, South Korea in the 1960s and Japan in
the 1920s

5. Vietnam has
many engineers, but it lacks skilfull workers. The bad salary scheme  does notencourage the development of talented
people.

Why does Vietnam still want modern
industries?

For the
past many years, Vietnam
has been striving to industrialize. However, the path proves to be rough with many
difficulties ahead. Is it imperative for Vietnam to continue, if it can
choose another, easier way?

many other
countries do not choose industrialization. They have been taking full advantage
of their geographical positions, histories, beautiful landscapes, to focus on
trade and services. Their achievements are admirable, because they known their
own strengths.

Vietnam is a developing country, but it has
great potentials in its coast, islands, agriculture, natural landscapes,
culture and history. Therefore, Vietnam
should use industrial products made by other countries, and in return, persuade
the world to buy its rice, eat its fish and drink its coffee, attract more
tourists to Vietnam to enjoy
beautiful landscapes and persuade ships to use seaport services in Vietnam.

Nguyen Duy Nghia