Workers at a Dung Quat Shipyard Company workshop in central Quang Ngai Province. — VNA/VNS Photo Thanh Long

Under the strategy approved by the Prime Minister earlier this month, Viet Nam has defined six industries that will be prioritised for development in the near future as they are key to the national economy.

The six industries are electronics; agricultural machinery; agricultural and seafood processing; ship building; the environment and energy saving and the manufacture of cars and spare parts.

These industries can stimulate domestic and foreign investment, especially from Japanese enterprises and spread ‘technological seeds' to other industries and the economy in general.

At the first policy meeting between the Ministry of Planning and Investment and the Japanese Business Federation, Keidanren, held in Ha Noi last Thursday, it was stated that liaising closely with Japan would help to speed up the industrialisation process in Viet Nam, especially as the country has targeted becoming industrialised in 2020.

With roughly 2,000 investment projects already in operation and nearly US$33 billion of registered capital in Viet Nam so far, Japan is top of the 101 nations and territories from around the world to invest in the country.

Over 83 per cent of their investment focuses on the processing and manufacturing industries, where Viet Nam is keen to attract more foreign direct investment.

The head of the Central Institute for Economic Management, Le Xuan Ba, said that the six priority industries could create a breakthrough in attracting even more FDI, especially from Japanese investors.

They would also help to change the structure and the different industrial models in Viet Nam, which would help the country's economic restructuring, he said.

The joint chairman of the Japan – Viet Nam Economic Committee, Takahashi Kyohei, said that ASEAN member countries were committed to developing an ASEAN Economic Community as a single market and production base by 2015 and Viet Nam would be at the heart of the market's supply chain.

Japan is already committed to helping Viet Nam boost its support industries, which are the foundations of industrial development, but this did not prove to be as effective as expected.

He said that the firms involved in support industries were mainly small and medium sized, and would not invest any capital unless they saw a prosperous outlook.

"The approval of the industrialisation strategy with its six prioritized industries encourages investors and gives us a clearer vision on how to work together and what to invest in," he said.

Minister of Planning and Investment Bui Quang Vinh, said that governments and companies in both countries were making a lot of effort to improve the investment climate in Viet Nam, including proposing support policies or solutions for existing problems.

In the past, Viet Nam has failed to put together an effective automobile and spare parts manufacturing strategy, said Vinh, blaming a lack of development in the country's support industries and the incompatibility of goals and policies, which include complex regulations, high taxes and fees. For example, motorbikes can be seen as luxury goods, but cause still traffic congestion.

In the near future, the country will focus on solutions for these two issues, while ensuring the investment climate is much more favourable.

In the latest move last Friday, the fifth phase of the Viet Nam-Japan Joint Initiative was launched to address existing issues and promote investment in Viet Nam's environment.

An action plan for the 18-month phase includes 27 points that cover 13 groups of issues such as taxation, customs, intellectual property, infrastructure development and food safety.

Minister Vinh said that the initiative is one of the best ways of engaging Japanese investors and the business community in general in policy making, thus making it easier for them once in operation.

Japan's Ambassador Tanizaki Yasuaki said that Japan will continue to work together with Viet Nam to exchange information and remove any obstacles while the phase is operational.

First launched ten years ago, the Viet Nam–Japan Joint Initiative is a special co-operation agreement between both countries, which encourages policy making talks between Japanese investors and Vietnamese Government agencies.

In the four previous phases, 85 per cent of the 337 points mentioned in the action plans were carried out on schedule. — VNS