This statement was made by former Deputy Minister of Trade, Luong Van Tu, the Government’s senior advisor in charge of WTO-related issues in a recent interview granted to a Voice of Vietnam (VOV) reporter on Vietnam’s achievements and limitations after three years of joining the organisation.

Reporter: In your opinion, what encouraging achievements has Vietnam made three years after joining the WTO?

Mr Tu: Vietnam’s economic role in the international arena has been highlighted clearly as many countries and organisations in the world evaluate it as a dynamic new economy with rapid development.

In 2008, Vietnam’s foreign direct investment (FDI) hit a record high of more than US$60 billion. This year, despite facing the global economic downturn, Vietnam’s FDI has still reached US$18 billion and is predicted to hit US$20 billion. The country has also recorded a positive growth rate of around 5 percent in 2009 thanks to the government’s open-door policies aimed at attracting investment and boosting exports.

In 2009, Vietnam has not fallen as seriously into the economic slowdown as some other countries.

Reporter:  Vietnam’s commitments to the WTO should be implemented along with the legal framework but its slow implementation has become a barrier to businesses, hasn’t?

Mr Tu: After joining the WTO, Vietnam has revised 30 legal documents to create a more open, transparent and stable environment, thus helping to attract more regional and international investors. However, amendments to a number of by-laws, especially decrees, have not yet been made.

Under the Government’s Project 30 to enhance administrative reform, as many as 5,700 administrative papers at all levels have been under consideration so duplicate or unnecessary documents will be abolished. The Prime Minister has proposed a 30 percent reduction of all legal documents.

If the project is implemented effectively, the country will save more than VND10,000 billion of the State budget each year, according to economic experts. After streamlining administrative procedures, Vietnam should develop e-commerce and e-government to create effective links between administration agencies, businesses and people.

Reporter: It was hoped that Vietnam’s entry into the WTO would create major breakthroughs but in fact, no major steps have been made so far. What is your opinion on this issue after spending ten years negotiating Vietnam’s entry to the WTO?

Mr Tu: Joining the WTO aims to create a healthy environment for economies to develop further. The entry to this organisation will not make any particular country richer or poorer. The crux of the matter for Vietnam is how to change domestic policies.

Unfortunately, one year after the country joined the WTO, the world economy has fallen into worst recession in 60 years. After joining the world’s trading field in 2001, China enjoyed a full time of thriving in the world economy and it has taken advantage of the opportunity. Because of the global economic downturn, Vietnam has failed to achieve all the results it expected from its entry into the WTO.

In my opinion, the goal of Vietnam’s WTO entry is to change the national economy over the long-term. If Vietnam had not received ODA assistance and other capital sources, it would not have been able to achieve such an economic growth rate. We are making preparations for sustainable development in the future. If we achieve an economic growth rate of 6.5 percent by 2010, we will likely achieve an annual GDP of 7-8 percent in the following years.

Reporter: In fact, the industrial sector’s added value remains low. This proves that we have not invested properly in replacing export items. Does this affect Vietnam’s trade balance?

Mr Tu: In the open-door period, almost all countries have to import machinery to increase investment. When the financial crisis was devalved, money in many countries has been devaluated. Vietnam’s industrial sector’s growth remains low while the Vietnamese dong is relatively stronger than its actual value, leading to an increase in import surplus. We need to consider the problem carefully as the current strong exchange rate favours imports not exports.

Reporter: Many people worry that integration into the world’s economy will make many foreign businesses to flock to Vietnam while domestic enterprises have to cope with the financial crisis and cannot improve their competitive edge. What do you think about that problem?

Mr Tu: Businesses are correct to worry about this issue. However, the important thing is to see what they will do. If businesses do not take any action, they will never stop worrying about this. For example, when Vietnam joined the AFTA, there was a worry that goods imported from ASEAN countries would flood the market but this never happened.

In fact, we advised businesses to expand wholesale and retail networks to control the domestic market seven or eight years ago. Domestic businesses often exported high quality products to foreign countries and sold poor quality products to local consumers and therefore, they lost their own market.

Reporter: What do we have to do in the future to make the WTO entry have a positive and effective impact on the national economy?

Mr Tu: The important thing is to stablise the macro-economy. In my opinion, this is a favourable period for Vietnam to restructure its economy by focusing on the added value of goods, boosting hi-tech industry, training human resources, investing in infrastructure and improving its competitive edge.

Reporter: Thank you very much.