Export dependence on FDI: The price of "medal"

Not too concerned about the dependence of exports on the FDI sector, Chairman of the National Assembly's Economic Committee Nguyen Van Giau is more interested in the significant improvement of the trade balance thanks to the key contribution of enterprises in this sector..

The absolute number of enterprises with trade surplus is increasing day by day.

“In 2012 and 2013, exports maintained a high growth rate, especially in the FDI sector, which has continuously had a trade surplus since 2008. FDI trade surplus has been increasing in absolute numbers. In 2008, the trade surplus was 6.6 billion USD; in 2009, the trade surplus was 4.3 billion USD; in 2010, the trade surplus was 2.1 billion USD. Then it increased very quickly to 6.2 billion USD in 2011 and 12.3 billion USD in 2012,” said Mr. Giau.

Motivation to stand up

Vice President of the Vietnam Leather and Footwear Association, Mr. Diep Thanh Kiet also said: "If you look from the outside, it can be seen that the fact that FDI enterprises account for a large proportion of exports is not okay. However, from the business perspective, I think that seeing a larger proportion of FDI enterprises will give domestic enterprises more motivation to stand up and compete."

According to Mr. Kiet, when the economy is in difficulty, many domestic enterprises have to close down, stop operating... but many FDI enterprises continue to expand and invest. That shows that, not only are they stronger than Vietnamese enterprises in terms of finance and management, FDI enterprises are also stronger in terms of endurance, resilience in the face of difficulties as well as the ability to take advantage of opportunities.

In addition, the Government has an Investment Law, so it cannot distinguish between FDI enterprises and domestic enterprises. It cannot distinguish between domestic enterprises' exports and needs to be given more importance than FDI enterprises'.

Vietnam's exports in 2013 could reach 133.5 billion USD, exceeding the forecast (131 billion USD), increasing by more than 16% and much higher than the target set at the beginning of the year of 126.1 billion USD, increasing by 10% compared to 2012.

In the first 11 months of 2013, the export of FDI enterprises (excluding crude oil) is estimated to reach more than 74.56 billion USD, while domestic enterprises only contributed about 47 billion USD. In 2012, the export turnover reached 114.6 billion USD, the contribution of the domestic economic sector was only 42.3 billion USD, FDI enterprises contributed 72.3 billion USD.

Wish... to escape this life

However, the price of the "medal" of export achievements in which FDI enterprises play a key role is also bitter. According to Mr. Huynh Dac Thang, Deputy Director of the Planning Department (Ministry of Industry and Trade), the FDI sector has contributed greatly to the country's overall export turnover. However, large FDI enterprises also import a lot and mainly operate in the form of assembly and processing, so the economy has not benefited much from this achievement.

Pointing out the reason for this situation, according to Dr. Tran Dinh Thien, Director of the Vietnam Economic Institute, is that Vietnam's supporting industry is not yet developed, industrial production is still heavily dependent on imported raw materials. Acting Director of the Central Institute for Economic Management, Mr. Nguyen Dinh Cung, once exclaimed: "I hope to escape the processing fate", because according to him, only by escaping this "fate" can exports truly enrich the economy.

In a locality next to Hanoi, Bac Ninh had a year of brilliant export success. According to the Department of Industry and Trade of Bac Ninh, in the first 10 months of 2013 alone, the total export turnover in the province was estimated at 20.86 billion USD, an increase of 94.2% over the same period last year. While the export achievements of FDI enterprises were in the tens of billions of USD, those of domestic enterprises were only in the tens of millions of USD.

Specifically, the FDI enterprise sector is estimated to reach 20.75 billion USD (accounting for nearly 99.5% of the province's total export turnover), an increase of 94.8%; the export turnover of the central enterprise sector only reached 47.9 million USD, the local enterprise sector is estimated to reach 60.3 million USD.

According to Mr. Nguyen Xuan Chin, Deputy Director of the Department of Industry and Trade of Bac Ninh, the province's export turnover increased by 94.2% compared to the same period in 2012, which is a good result. However, the joy is not complete when the province's export depends almost entirely on the FDI enterprise sector.

Meanwhile, there is a lack of leading domestic enterprises participating in export activities and the types of exported goods are not diversified, mainly semi-processed goods, and the competitiveness of products in the market is low. One of the main reasons that helps FDI enterprises achieve a much higher export growth rate than domestic enterprises is thanks to the outstanding advantages of stable consumption markets.

According to Thoibaokinhte