Vietnam News, 11 June 2015. Domestic firms ignore AEC challenges: Experts.
An edited extract of the original article is reproduced below.
HA NOI (VNS) — Vietnamese businesses are oblivious to the pressures of competitiveness in the wake of ASEAN moving up the ladder from AFTA to ASEAN Economic Community (AEC) by the end of 2015.
A research by National University revealed that up to 60 per cent of Vietnamese enterprises believed that the AEC’s establishment will not have much effect on the country.
This was revealed at a conference, the ASEAN Economic Community: Opportunities and challenges to Vietnamese enterprises, held by Bank for Development and Investment of Viet Nam (BIDV) in Ha Noi yesterday.
The BIDV’s general director Phan Duc Tu said that this year will be the year of profound integration for Viet Nam, with a number of FTAs (free trade agreements) concluded or under negotiations. Viet Nam has signed two FTAs with South Korea and the Eurasian Economic Union (EEU) and is expected to conclude another one with the European Union this month. In Southeast Asia, the AEC is scheduled to be formed by Viet Nam and other ASEAN member states by the end of this year.
“Integration is an inevitable trend and is expected to have a large and profound impact. For an economy, integration helps expand markets, boosts trade turnover, and serves as a magnet for FDI inflows,” Tu said.
However, it has also brought substantial challenges, he noted, adding that the country’s economy and business community will be subject to greater competitive pressures, while, with low competitiveness, the size of the economy and businesses will remain small. The huge FDI inflows will result in macroeconomic imbalance, unless proper regulations are still put in place. In addition, the participation in FTAs will jeopardise Viet Nam’s sovereignty in certain economic development policies. There will be risks associated with integration, such as human resource challenges, trade investment disputes, and intellectual property issues…
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