Ministries shooting themselves in the feet
Source: 15-JUL-2008 Intellasia | Vietnam Investment Review page 8
Jul 15, 2008 - 7:00:00 AM Vague World Trade Organisation action plans have held ministries and localities back from dealing with economic challenges.

When Vietnam was admitted to the World, Trade Organisation (WTO) in late 2006, the Vietnamese government issued Resolution 16/2007/NQ-CP in February 2007 to require ministries and local authorities to build action plans for fast and stable growth.

The action plans have to relate to legal frameworks, institutional and market systems, investment effectiveness, competitiveness, administration, education and agriculture.

Ministries and localities, however, have been too slow in building action plans. Ministry of Industry and Trade figures show that by March 2008, 14 out of 22 ministries and 34 out of 64 provinces had action plans.

Only eight ministries had English versions of their plans, while no provincial plans had been translated into English.

Capacitate AIS development specialist director Lars Udsholt said besides government agency sluggishness, the action plans were not systematically aligned to Resolution 16.

Raymond Mallon, consultant for the USAID-funded Vietnam Competitiveness Initiative project, said: "There are some overlaps in activities with each other and with other agencies. Some actions are stated in quite general and vague terms."

Mallon noted that the plans must clearly address policy issues with more emphasis on civil society and consultative approaches.

Tran Dinh Thien, vice head of the Vietnam Economics Institution, said socio-economic difficulties with high inflation and a mounting trade deficit were linked with the nation's WTO accession.

"Many people thought that event would open many opportunities for Vietnam to boost its economic development. However, they now can perceive that the challenges are bigger than opportunities and that is mostly because of their unawareness of their real capabilities and being slow in building plans to reform themselves," Thien said.

Vietnam's inflation rate hit more than 18% in the first half of this year while the trade deficit ballooned to US$14.7 billion.

"They [the government agencies] were too enthusiastic with Vietnam's accession to the WTO and did not look at their real situation to make good preparations to make use of the opportunities," Thien said.

Mallon said ministries and localities needed to work with businesses to better understand the rapidly evolving development process, particularly industrialisation in Vietnam.