Export diplomacy needs to be as drastic as vaccine diplomacy

In the context of businesses seriously lacking orders, Dr. Nguyen Quoc Viet said that the Government needs to have policies to promote export growth, even implementing order diplomacy - as it has done with vaccine diplomacy.

TS. Nguyễn Quốc Việt: Ngoại giao xuất khẩu cần quyết liệt như ngoại giao vaccine

Many industries recorded a 30-40% decrease in orders. (Source: Investment Newspaper)

Business is difficult

The socio-economic situation report recently released by the General Statistics Office ( Ministry of Planning and Investment ) shows that in May 2023, the whole country had more than 12,000 newly established enterprises and 5,952 enterprises returning to operation.

However, in May, there were also 5,364 enterprises registering to temporarily suspend business for a period of time; 4,717 enterprises stopped operations pending dissolution procedures and 1,223 enterprises completed dissolution procedures.

In the first five months of the year, 95,000 businesses were newly registered and returned to operation, down 3.7% compared to the same period last year. On average, 19,000 businesses were newly registered and returned to operation per month.

Meanwhile, the number of enterprises withdrawing from the market was 88,000 (55,200 enterprises temporarily suspended business; 25,500 enterprises stopped operations pending dissolution procedures; 7,300 enterprises completed dissolution procedures), an increase of 22.6% over the same period last year. On average, 17,600 enterprises withdrew from the market each month.

According to the General Department of Customs, in the first half of May, the country's exports reached 11.45 billion USD. Accumulated from the beginning of the year to May 15, the total import-export turnover reached 230.58 billion USD (exports reached 118.58 billion USD, imports reached 112 billion USD), down approximately 40 billion USD compared to the same period last year.

Many industries have recorded a 30-40% decrease in orders. Currently, although it is the middle of the second quarter of 2023 - the peak ordering season for many industries such as wood products, textiles, footwear, etc., the export market has not shown any signs of improvement. This has led to labor cuts in factories and businesses.

Sharing with TG&VN reporters about the above report, Dr. Nguyen Quoc Viet, Deputy Director of the Vietnam Institute for Economic and Policy Research (VEPR) under the School of Economics, Vietnam National University, Hanoi, commented that the Government's efforts in recent times have gradually strengthened business confidence, supporting businesses to recover and develop.

However, businesses are still facing many difficulties, with inventory and bad debt at risk of increasing, and many businesses in some sectors have even had to stop operations, especially in the textile, construction, real estate, and retail sectors, leading to loss or reduction of working hours and many difficulties for workers.

According to Dr. Nguyen Quoc Viet, the Government's report as well as the National Assembly Economic Committee's Inspection Report have frankly acknowledged the difficulties caused by the impact of the economic recession, which has led to a decrease in exports and lack of capital, which has been increasing the pressure on businesses to maintain operations.

The Government believes that this situation may continue to become more complicated and difficult in the coming time. In particular, some large enterprises operating in many industries and fields have to sell assets at low value, be acquired or merged to maintain production and business.

In addition, in the first quarter of 2023, foreign direct investment (FDI) attraction also decreased for the first time in both implemented and newly registered numbers; of which the number of newly registered numbers decreased by nearly 40%, the deepest decline since 2011.

Dr. Nguyen Quoc Viet, Deputy Director of the Vietnam Institute for Economic and Policy Research (VEPR) under the School of Economics, Vietnam National University, Hanoi. (Photo: NVCC)

The Deputy Director of VEPR emphasized: “All these difficulties and the situation of low-quality and seriously declining private investment, in addition to the domestic and foreign macro causes as mentioned, are also due to weaknesses in the institutional and legal environment... which are huge barriers to the normal operations of businesses and people, thereby creating tangible and intangible costs, reducing the effectiveness and efficiency of policy implementation.”

Need to implement export diplomacy

To solve the above difficulties, Dr. Nguyen Quoc Viet said that in the short term, fiscal policies need to play a leading role in supporting economic recovery.

Policies need to be coordinated and comprehensively coordinated, as well as consulted with relevant parties, so that planning and implementation are smooth and rely as much as possible on market solutions, instead of administrative orders.

Mr. Viet emphasized: “In the coming time, the Government needs to have policies to promote export growth, even implementing order diplomacy and export diplomacy, as it has done with vaccine diplomacy.

During the period when Vietnam lacked Covid-19 vaccines, the Government and the Ministry of Foreign Affairs had strong instructions for all Vietnamese representative agencies abroad to seek public and private partners to support Vietnam. The current export situation of Vietnam is similar. Therefore, export diplomacy needs to be as strong as vaccine diplomacy.

Order diplomacy aims to introduce, promote, and connect domestic markets and businesses with foreign businesses to take advantage of relationships and information from embassies, trade offices, and focal points in charge of promoting trade and investment abroad in Vietnam. Thereby, providing information about demand and orders.

Dr. Nguyen Quoc Viet also proposed that the Government should have special working groups to promote brands in a synchronous manner between national brands and specific export brands and products.

This special task force can carry out promotional campaigns and make national investments in combination with local resources and businesses and associations to promote images and products that are unique, special and strengths of Vietnam such as: agricultural products, wooden products, handicrafts, etc.

In addition, Vietnam needs to continue institutional reform to improve the investment and business environment, with a favorable, effective and unified environment for businesses being the most important; policy forecasting and assessment work needs to be done regularly, continuously and with more publicity, transparency and timeliness...

On the business side, Mr. Tran Nhu Tung, Vice President of the Vietnam Textile and Apparel Association (VITAS), suggested that in the short term, it is necessary to strengthen trade promotion and working programs between Vietnam and other countries to expand export markets through Trade Counselors; focusing on countries in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the European Union (EU) - places where Vietnam has signed bilateral trade agreements.

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