Old equipment stymies output

Only 10% of Vietnamese enterprises use modern technology, of which only 2% have hi-tech.

This is much lower than that of Thailand with 31%, Malaysia with 51%, and Singapore with 73%.

A report released by the science and technology ministry said most local businesses were technologically backward as 76% of their machines and production lines had been imported in the 1950s and 1960s. About 75% of the machines had fully deteriorated.

The number of enterprises operating in the hi-tech sector accounts for only 2% of the total. However, they participate in low-value segments.

Economists said after joining the Trans-Pacific Partnership (TPP), Vietnam should carefully prepare to take advantage of the new opportunities for further development.

"We cannot develop if we do not have attractive and favourable conditions to lure investment," Tran Dinh Thien, director of the Vietnam Economics Institute, said.

old equipment stymies output hinh 0
Factories that use outdated technology cause pollution. A report revealed that 90% of local firms use outdated technology. (Source: VNA)

Thien said Vietnam's economy depends heavily on China as it is the country's largest export market. In addition, China accounts for 19% of the total import-export value in Vietnam.

"Vietnam has been affected due to its dependency on imports from China. After joining the TPP and the global supply chain, Vietnam should reduce its dependency," he said.

Former Vietnam Ambassador to the Republic of Korea (RoK) Nguyen Phu Binh said Vietnam should have large private groups.

The RoK experience shows they have used the industrial park (IPs) model with special mechanisms and favourable conditions to attract investments effectively.

The development of IPs in Vietnam has not been planned as every locality wanted to build IPs with a large number of preferential terms to lure investors without specific orientation, Binh said.

He said Vietnam’s participation in the TPP is a smart choice as it could join a platform that suited its capacity.