State assistance for the development of Vietnam's support industriesmust be studied carefully to ensure its effectivity, experts said.
Thecall was made in response to the draft decree on the development ofsupporting industries that the Ministry of Industry and Trade recentlyformulated.
Under this decree, individual and corporateproducers and distributors of products and services for supportingindustries will be allowed to borrow low-interest credit from a30-trillion VND (1.4-billion USD) support industries fund.
Thefund will be sourced from the State budget, official developmentassistance (ODA) loans and other investment funds, including an initialaid of 2 trillion VND that will act as catalyst for the first threeyears.
Dao Phan Long, Vice Chairman of the Vietnam MechanicalEngineering Association, said the most important task following theestablishment of the fund would to determine which companies deserved toreceive the aid, to avoid rampant and ineffective investment. Detailedpolicies should also regulate the use of the fund, Long added.
Hesuggested that business associations act as advisors while centralagencies manage, instead of allocate, the funds to municipal andprovincial agencies to further ensure effective implementation.
Besides the aid, the crafting of appropriate policies for support industries are more urgent, said industry insiders.
TranTuan Anh, Director of the 19-8 Mechanical Joint Stock Company, revealedthat enterprises in the support industries sector were interested inpolicies that would make their products more attractive to Vietnam-basedforeign companies.
The Government should regulate whichVietnamese-made products foreign companies in Vietnam have to use intheir production, Anh said, adding that Vietnam's support industriesneeded this because the capital needed to invest in support industrieswas huge.
Long said it would be difficult for Vietnamese supportindustry enterprises to take part in foreign companies' supply chainsbecause the latter often brought in their foreign support industrypartners to Vietnam when setting up establishments in the country.
Vietnamcurrently has 1,400 enterprises in its support industries sector thatmanufacture electrical, electronics, metal and rubber components andaccessories.
Inadequate supply of components and accessoriesfrom domestic support industries has forced manufacturers to look forforeign suppliers, leading to the country's prolonged trade deficit inindustrial production in previous years.
Vietnam had to import awide range of components and accessories worth 53.1 billion USD lastyear, and that number is expected to jump to 67.6 billion USD this year.-VNA
Thecall was made in response to the draft decree on the development ofsupporting industries that the Ministry of Industry and Trade recentlyformulated.
Under this decree, individual and corporateproducers and distributors of products and services for supportingindustries will be allowed to borrow low-interest credit from a30-trillion VND (1.4-billion USD) support industries fund.
Thefund will be sourced from the State budget, official developmentassistance (ODA) loans and other investment funds, including an initialaid of 2 trillion VND that will act as catalyst for the first threeyears.
Dao Phan Long, Vice Chairman of the Vietnam MechanicalEngineering Association, said the most important task following theestablishment of the fund would to determine which companies deserved toreceive the aid, to avoid rampant and ineffective investment. Detailedpolicies should also regulate the use of the fund, Long added.
Hesuggested that business associations act as advisors while centralagencies manage, instead of allocate, the funds to municipal andprovincial agencies to further ensure effective implementation.
Besides the aid, the crafting of appropriate policies for support industries are more urgent, said industry insiders.
TranTuan Anh, Director of the 19-8 Mechanical Joint Stock Company, revealedthat enterprises in the support industries sector were interested inpolicies that would make their products more attractive to Vietnam-basedforeign companies.
The Government should regulate whichVietnamese-made products foreign companies in Vietnam have to use intheir production, Anh said, adding that Vietnam's support industriesneeded this because the capital needed to invest in support industrieswas huge.
Long said it would be difficult for Vietnamese supportindustry enterprises to take part in foreign companies' supply chainsbecause the latter often brought in their foreign support industrypartners to Vietnam when setting up establishments in the country.
Vietnamcurrently has 1,400 enterprises in its support industries sector thatmanufacture electrical, electronics, metal and rubber components andaccessories.
Inadequate supply of components and accessoriesfrom domestic support industries has forced manufacturers to look forforeign suppliers, leading to the country's prolonged trade deficit inindustrial production in previous years.
Vietnam had to import awide range of components and accessories worth 53.1 billion USD lastyear, and that number is expected to jump to 67.6 billion USD this year.-VNA
