Value-added exports crucial to Vietnam

Research showed that several Asean countries - even those that have made progress similar to Viet Nam - have shifted to high value-added exports, he said.

Yet, Vietnam continued to increase its exports of labour-intensive or value-added products. The economist complained that Vietnam's exports have shifted from labour-intensive or natural resource-intensive exports in the 1990s to those which were just labour-intensive.

The export of low-price agricultural produce has made Vietnam a major exporter by volume. But the lack of processing technology and the inability to properly label and market the produce has made it impossible to yield either high revenue or a global reputation for the exports.

Vietnam was ranked second among the world's rice exporters by volume but its trademark was all but unknown,

says Institute of Agricultural Science for Southern Viet Nam director Bui Chi Buu. Whenever he went abroad he saw "Made-in-Thailand" but not "Made-in - Vietnam" rice, he said.But the return for processed agricultural produce was often ten-fold that of raw exports, he said. Exported raw catfish earned about US$1 per kilogramme, filleted and packaged it realised $10 per kilogramme.

Viet Nam Pepper Association president Do Ha Nam said 70 percent of pepper was exported raw and often sold at below the international price, as a result.

"Indonesia, Malaysia, India and China imported and processed our raw pepper and sold it into the international market at much higher prices," he said.

The lack of support industries continued to ensure high import costs and little export of value-added garment, footwear and electronic goods.

The Industry and Trade Ministry's Institute for Strategic Research and Industrial Policy director Phan Dang Tuat reports that manufacturing makes the least effort in the five endeavours to produce value-added goods.

They are research - design, component production, manufacturing, distribution and sales. Elsewhere, only five of 100 enterprises that create value-added products are manufacturers, he says.

"But in Viet Nam manufacturing enterprises overwhelm the supporting enterprises."

The director says Vietnam has about 2,000 garment enterprises but only about 250 supporting enterprises. The mechanical and electronics industries are the same.

Former trade minister Truong Dinh Tuyen said development planning and strong government encouragement for supporting industries are crucial to value-added exports because of the fierce competition and harsh trade barriers Viet Nam faces.