Viet Nam Urgently Requires Legal Framework for Strategic Industrial Development

Hanoi, The Gulf Observer: Viet Nam faces a critical need for a robust legal framework to precisely delineate the developmental trajectory of key industries in the ongoing process of industrialization, as highlighted by the Ministry of Industry and Trade (MoIT).

Currently, the existing legal system lacks specific regulations for identifying and fostering key industries, offering no concrete policies to propel their development. Crucially, it fails to provide regulations for enhancing competitiveness within these pivotal sectors. The absence of specific laws addressing mechanisms for coordinating policies toward sustainable industrial production, especially in alignment with circular economic models, green growth, and sustainable production, further compounds the challenge.

According to the MoIT, there has been insufficient attention to market support solutions during the formulation of industrial policies. Additionally, mechanisms and policies governing the application, transfer, improvement, and innovation of production technology within industrial sectors have not been adequately addressed.

Competitiveness among enterprises, particularly those in key industries, remains constrained. Factors contributing to this limitation include restricted labor and management qualifications in domestic enterprises, resulting in low labor productivity and a significant impact on competitiveness.

The business environment, while showing improvement, still harbors shortcomings that impede the stable development of key industries, necessitating sustained policies and long-term development strategies.

The industrial sector’s export growth remains reliant on foreign direct investment (FDI) enterprises. In the first two months of this year, FDI enterprises accounted for a substantial 72.8% of the total export turnover of over $59 billion, with the domestic sector contributing only 27.2%.

Experts note that Viet Nam’s manufacturing industries are primarily export-focused, lacking large enterprises in key industrial sectors. The Deputy Prime Minister, Trần Hồng Hà, underscores the pivotal role of the industry in economic development, emphasizing the need for plans and proposals to develop key sectors.

To address challenges, industry experts stress the importance of developing foundational and key industries. Viet Nam’s ongoing infrastructure projects in transportation and energy sectors necessitate a focus on developing mechanical and supporting industries. The Vietnam Association of Mechanical Enterprises (VAMI) emphasizes the need for planning, strategy, and roadmaps to manufacture essential devices for these projects.

To catalyze industrial development, industry leaders call for the expeditious completion and approval of a Key Industrial Law by the Ministry of Industry and Trade. Additionally, supportive policies minimizing risks for leading enterprises collaborating with smaller domestic counterparts are deemed essential. The creation of a legal corridor is seen as a pivotal step to attract investments and foster the development of industrial products in Viet Nam.