Joining AEC: Going together will go very far

Proactiveness and solidarity will be the key principles to enhance the competitiveness of enterprises and the economy in ASEAN and international integration, because “if you go alone, you can go fast. But if we go together, we will go very far”.

The establishment of the ASEAN Community, of which one pillar is the ASEAN Economic Community (AEC), will be a turning point, marking the comprehensive regional integration of Southeast Asian economies, moving towards the model of an economic-security-social community and enhancing the competitiveness of the regional economy, helping ASEAN become a large market with more than 600 million people and a total annual GDP of about 2,000 billion USD, and at the same time a major exporter in the world.

However, most Vietnamese enterprises are not fully aware of the challenges of the AEC nor are they ready to take advantage of the opportunities it brings. Enterprises are quite optimistic that the increasing mobility of labor, reduced trade barriers and freer investment flows will enhance competitiveness. However, only about 40% of enterprises fully understand the impacts of the AEC on their business. This is a relatively low rate compared to other ASEAN countries.

AEC may be oriented by governments, but it cannot succeed without the active participation of businesses and the public in general. To seize opportunities, respond to challenges and risks when AEC is established at the end of this year, Vietnamese businesses, the Government and the people need to pay attention to the following four issues.

Firstly, building a positive mindset in integration is very important. Enterprises need to raise awareness and understanding of integration and consider economic integration programs as an economic commitment that includes both cooperation and competition. Enterprises need to consider ASEAN as an important market like the US, EU... because this neighboring market ensures that enterprises save costs and have potential business scale.

It is necessary to consider ASEAN as a home ground, and clearly realize that if we cannot compete and develop within ASEAN, deep integration into the world market will be ineffective. Enterprises need to have deeper understanding and research of the ASEAN market as well as the support policies that the AEC brings. From there, we can outline business strategies, promote exports and invest more strongly in this potential market.

High-tech industrial production, strengthening connectivity to enhance competitive value.

Second, it is necessary to improve and promote the core values ​​of the enterprise to enhance competitiveness. An enterprise must be considered a chain of added values, created by direct production and business activities and support activities.

Production and business activities include product creation, marketing, distribution and after-sales service. Support activities include resources, input infrastructure, leadership, law, culture, information technology, etc. to support value creation and cost reduction.

The capacity of a business is the set of value-added chains of those activities and this is the core value of the business. Creating a difference in core values ​​will ensure that the business has a comparative advantage over its competitors, bringing profits to the business. To recognize that difference, the business must build for itself competitive analysis tools such as SWOT (strengths, weaknesses, opportunities, challenges), competitors and the market.

Third, modern business trends are moving towards common service value chains and industry linkages. Therefore, businesses (especially in industry and banking associations) need to learn from each other about competitive strategies in business, participate in value chains together, create strength through scale advantages and better promote comparative advantages.

When AEC is established, it is predicted that many foreign enterprises will invest in Vietnam, they will penetrate and take over the market share of Vietnamese enterprises. To compete, Vietnamese enterprises, which are small and medium enterprises, need to connect more and more closely with each other, creating the strength of the community.

Enterprises also need to increase exchanges and dialogues with government agencies as well as associations to keep up with information and policies, and at the same time reflect difficulties and obstacles so that authorities can promptly make appropriate adjustments to the reality. In addition, Vietnamese enterprises can also cooperate with other ASEAN enterprises to increase competitiveness with non-ASEAN enterprises.

Fourth, in addition to improving the quality of directional negotiations and expanding the market, the Government and relevant agencies also need to have activities and support programs to improve and disseminate knowledge to the business community about the AEC.

It is necessary to reform institutions, build a consistent, open, transparent, public, and predictable legal corridor, creating a more favorable environment for business and investment. It is necessary to establish a development roadmap and strategic planning for Vietnam's key products and industries to take full advantage of advantages such as geographical location, human resources, etc. In addition, it is necessary to have a development strategy, protect the interests of enterprises and prevent financial risks (especially for small and medium enterprises) in developing the domestic market and the ASEAN region.

Political and social organizations, Vietnamese people and consumers also need to build for themselves a smart and scientific consumer culture, helping to improve the competitiveness of businesses and the country.

Dr. Doan Duy Khuong/chinhphu.vn

(Vice President of VCCI, President of ASEAN BAC Vietnam)