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PlanningWednesday, 03/23/2005, 03:02

Import-Export Schemes For The 2006-2010 Period

Vietnam has targeted export sales of US$114 billion and an annual export growth rate of 16% for the 2001-2005 period. However, there have been great challenges to overcome to meet these targets.
Import-Export Schemes For The 20


Import-Export Schemes For The 2006-2010 Period


Vietnam has targeted export sales of US$114 billion and an annual export growth rate of 16% for the 2001-2005 period. However, there have been great challenges to overcome to meet these targets. In the first three years of this period, just US$52 billion worth of exports and an export growth rate of 11.7% were achieved. Suppose the growth rates reported in the last two years were 14% and 12%, respectively, the total export receipts would be valued at US$101 billion, realizing just 88% of the plan.

Vietnam also remains far from meeting the target of �increased processed products and reduced crude ones� set for export goods. It is projected that by 2005, the export ratio of heavy industrial and mineral products will remain as modest as 29.5%, light industrial products and handicrafts 42.6% and agricultural, forestry and aqua-products 27.9%.

Meanwhile, imports are likely to exceed the 2% cap, reaching US$119 billion, that is, a trade deficit of some US$18 billion over five years. By 2005, materials are likely to account for 61% in the import structure, lower than the target ratio of 66%. Vietnam�s main manufacturing industries will depend heavily on imports as imports of machinery and equipment in 2005 are expected to account for 32.6% (as compared with the target of 30.5%) and imports of consumer goods 6.4% (as compared with the target of 3.5%).

In the first year of this period, there were just three items with imports valued at more than US$1 billion. Now, there are five items of the kind, greatly affecting the economy: machinery and equipment (over US$5 billion), gasoline and oil (US$2.4 billion), materials for textile and garment, and footwear production (over US$2 billion), fabrics (nearly US$1.4 billion), and steel (US$1.1 billion).

Vietnam�s exports remain modest compared with regional countries in terms of sales and average per capita ratios. Goods exported have low processed contents and have to go through many intermediaries. Meanwhile, imports have yet to reduce dramatically the backwardness of the manufacturing sectors and the lack of access to source technology. The market structure has not been improved, depending excessively on the Asian market (making up 50% of exports and 75% of imports).

To achieve export growth targets of 13% to 16% in the 2006-2010 period, or export sales of over US$40 billion a year, Vietnam has to make extreme efforts in either of the two following schemes:

Scheme 1: Exports grow 14% a year to double the 2005 export sales to US$50 billion in 2010. Imports growth must be capped at 13% a year.

Scheme 2: Greater efforts are needed to obtain an export growth rate of 15% to 16% a year. According to this scheme, exports of crude oil and coal will decline as local oil refineries come on stream and reserves fall. Aqua-products are considered spearhead products among the group of agricultural, forestry and aqua-products, due to their great potential and stable markets. Textile-garments and footwear are still staples in the group of manufacturing products, with textile-garment exports alone expected to reach US$8-10 billion in 2010.

Main import items are still materials, equipment and technology. Imports of gasoline and oil, fertilizer and steel billets will be monitored to reduce dependence on outside suppliers.

In the 2006-2010 period, the Asia-Pacific region will remain Vietnam�s key markets. China will be its nuclear one with growth rates maintained in this period and main items including crude oil, rubber and vegetables and fruit. The ratio of textiles-garments, aqua-products and wood sent to Japan will be raised from the current 14.4% to 17-18%.

Textiles-garments and footwear continue to be Vietnam�s main exports to Europe and North America, markets that are likely to be growing fast if there are appropriate policies, and cooperation in trade.
 

 


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