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Vietnam Logistics: Strategy to better connect with global value chain
Ngoc Thuy 14:22, 2017/12/19
The Vietnam Logistics Forum was organized today in Hanoi, under the chairmanship of Minister of Industry and Trade Tran Tuan Anh, and Vice Minister of Transport to discuss how to better connect Vietnam with global value chains.
At the conference, delegates heard reports by the Vietnam Logistics Association, the World Bank, and Vietjet Air Cargo on an action plan for logistics sector and how to turn Vietnam into a regional air logistics hub. They were also updated with the latest situation of Vietnam’s logistics sector.


 
While significant progress has been made in investment in hard infrastructure, there is a large agenda for improving Vietnam’s logistics performance as evidenced by drop in the country’s ranking in the Logistics Performance Index from 2014 to 2016 from 48 to 64.

 “A strategy to enhance trade competitiveness in complementarity to trade liberalization is needed to support Vietnam’s vision of becoming an upper middle -income country by 2035 with a more sophisticated economy and exports that sustain accelerated growth.” Says Ousmane Dione, the World Bank Country Director for Vietnam.” Accordingly, there is a need for the Government and the private sector to define a clear agenda for reform if the quality of logistics services is to be raised, to meet the demand of an increasingly sophisticated economy.”

There is need to tackle some of the major policy and regulatory impediments to improving logistics by lowering costs and enhancing reliability, interventions will be required around four main pillars, namely: 1) promoting trade facilitation by simplifying customs and specialized management regulations; 2) enhancing efficiency of trade-related infrastructure and the quality of connectivity; 3) building a competitive logistics service sector; and 4) strengthening interagency coordination and partnership with the private sector. Both the public and private sectors have to contribute to improving logistics performance.  The World Bank is working closely with the Government and other stakeholders on several activities relating to these pillars.

The country’s consistent policy of openness and export-led growth has paid off well. However, Vietnam often carries out the lowest value-added segment of production in global value chains. Export performance remains largely driven by the FDI sector, which accounts for 70 % of total export, showing weak linkages between domestic firms and global value chains. Moreover, Vietnam’s trade cost is higher than ASEAN average. According to delegates, a strategy to enhance trade competitiveness in complement to trade liberalization is needed to support Vietnam’s vision of a high-income country by 2035 with a more sophisticated economy and exports that sustain accelerated growth. 

The Vietnam Logistics Report 2017 was also launched on this occasion. The report provides a close look at the inherent vantage points and dynamics of international markets, revealing Vietnam logistics sector’s great potential for growth and deep integration in the global logistics arena. The annual report reviews, assesses and informs the current state and outlook of the logistics market in Vietnam and the world, analyzes the relevant regulations and policies in the field, and informs on public sector management, production, trade and investment by businesses, research and communication in the logistics field. 

The report suggests that in 2018, more focus should be paid to fast-track administrative reforms, reduce or simplify logistics-related administrative procedures, and accelerate key logistics infrastructure projects. Authorities, associations and businesses should also look at embedding regional integration and partnership efforts in market liberalization, expanding existing logistics training system, and increasing communication, and further perfection of the regulatory framework and public sector management system to support logistics development.

The Vietnam Logistics Forum is organized by Ministry of Industry and Trade, Ministry of Transport, the Vietnam Logistics Business Association, the Vietnam Economic Times, and the World Bank in Vietnam, with financing from the Australia-Bank Partnership Trust Fund. 
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