The Government has issued a decree that is expected to boost support industries and improve the competitiveness of Vietnamese products, advancing the country's quest to become industrialised by 2020.

Support industries provide jobs and promote exports, but on top of everything else, prevent excessive dependence on imported goods and services.

But their development has been slow in Viet Nam because policies are not attractive enough to investors, the deputy director of the Department of Light Industry, Tran Hung, said.

A master plan to develop support industries was created in 2007.

Two years later the Ministry of Industry and Trade (MoIT) set up a centre to help develop business in support industries.

Directly managed by the Industrial Policy and Strategy Institute, it is tasked to develop a database and links between businesses.

Construction of the country's first support-industry park began in April 2009 in Bac Ninh Province near Ha Noi.

Last July, the Government approved a plan to build a support-industries zone south of Ha Noi.

Though some progress has been made, auxiliary industries have yet to make a breakthrough, the Government website says.

To achieve the breakthrough, certain industries should be identified for focused development at regular periods, a task that has been done successfully in some neighbouring countries, it says.

Viet Nam has achieved success in developing support industries for the motorbike and electrical appliances industries, Hung told a workshop titled "Auxiliary industries and Goods Production and Export" held late last year in HCM City.

But some other key sectors like machinery, garment and textile, and footwear are hurt by the lack of support industries, which is causing them to depend excessively on imported feedstock and inputs, thus losing out on profits and competitiveness.

The garment sector, for instance, imports 55 per cent of its needs.

The Government's website says the promulgation of new decrees such as 12/2011/QD-TTG, is imperative for creating a legal framework that will enable State agencies to oversee and manage the sector.

The decree is expected to boost support industries for some key sectors like IT, electronics, automobiles, textile and garments, leather footwear, and technology.

It provides for giving priority in land allocation and lease.

Factories in a particular sector that are clustered in industrial parks will get priority in utilising infrastructure and other services.

They will also get assistance in labour recruitment and training, financial assistance from the National Science and Technology Development Fund and others, technology transfer, copyright, and hiring foreign experts.

The National Investment Promotion Programme this year would focus on attracting investment in support industries and in private-public partnership projects in infrastructure, Nguyen Thi Bich Van, deputy head of the Foreign Investment Agency, said.

It would particularly turn to investors with expertise in these areas, especially from Japan and South Korea, she said.

Viet Nam's first support-industry park, which is coming up in the Que Vo Industrial Park in Bac Ninh, is a partnership between Viet Nam and Japan.

The biggest challenge to attracting investment in support industries was the lack of clear policies and information about the field, Van said.

The new decree was likely to help make a breakthrough, she added. 

Source: VNS