Stimulating domestic trade growth a must

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VOV News English - 33 month(s) ago 3 readings

Stimulating domestic trade growth a must

(VOV) - Despite its considerable contribution to the country’s socioeconomic growth, Vietnam’s domestic trade has not received proper investment to secure a firm foothold in the market.

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According to a recent report by the Ministry of Industry and Trade (MOIT), Vietnam’s retail and services revenues in 2011 saw a sharp year-on-year increase of 24.2 percent to VND2,004.4 trillion (US$95.28 billion). It is predicted to rise to VND2,445 trillion (US$116.22 billion) in 2012, up 22-23 percent against 2011.

Since the Prime Minister approved the domestic trade development project in 2007, the sector has contributed 13 – 15 percent to the nation’s GDP every year and created 5.5 million jobs.

It has also met the growing demand of domestic production and consumption and contributed to the country’s international integration, especially in terms of economic integration.

As a result of less investment in upgrading infrastructure facilities, the development of domestic trade is unsustainable and unable to keep up with the economic growth.

Other factors include the lack of capital and poor management skills within the domestic trade sector.

Furthermore, the inadequate connectivity among distributors and between producers and distributors, in part, leads to the unstable supply of goods.

However, the main problem is that authorities are not fully aware of the importance of developing the domestic trade sector, as proven by the lack of synchronization in law enforcement, unfeasible legal documents, and poor supervision and management.

Identifying trade performance, particularly goods distribution, plays an important role in promoting production and ensuring consumption and social welfare.

MOIT Minister Vu Huy Hoang emphasized that developing the distribution chain should go along with ensuring the supply-demand balance and stabilizing prices.

In the process of integration into the international market, Hoang stated, it is necessary to weigh up the pros and cons when it comes to fulfilling WTO commitments.

So, the MOIT will propose measures to support businesses in training, legal consultancy, marketing, trade promotion and other areas to ensure they are regaining ground in the country.

The ministry will also help domestic distributors to have access to capital, modern technologies, and management skills from the world’s leading corporations.

A number of related laws, policies, and regulations such as the Economic Needs Test, will be put in place to promote transparency and avoid risks while attracting foreign investment in the goods distribution network at both central and local levels.

In addition, close cooperation between central and local authorities in managing foreign investment and the role of the Vietnam Retailers Association are no doubt of great importance to the development of the domestic trade sector.

In order to corner the domestic market, businesses themselves should spare no effort to sharpen their competitive edge.

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