VIET NAM INDUSTRY WHITE PAPER 2019 Manufacturing and Subsector Competitiveness

The Viet Nam Industry White Paper 2019 analyses and evaluates the current status of manufacturing and processing industries in Viet Nam. It identifies key bottlenecks and issues that need to be addressed at both macro and sub-sector levels and suggests policy recommendations to achieve the Government's objectives to speed up the country's industrialization process through value addition and technological upgrading taking into consideration of the impact of the fourth industrial revolution and aging population.

The White Paper Viet Nam Industry 2019 was developed within the framework of the Project "Support to the Government of Viet Nam in the formulation of Sub-Sector Industrial Strategy and of the related Implementation Policy through Institutional Capacity Building" which aims to contribute to upgrading industrial competitiveness in terms of further elaborating its strategy at the subsector level as well as fostering the implementation of a set of industrial policies to promote priority sectors and value chains. The Project, funded by the Republic of Korea, was launched in 2016 by the Ministry of Industry and Trade and the United Nations Industrial Development Organisation (UNIDO) following their successful collaboration that produced the Viet Nam Industrial Competitiveness Report (VICR) 2011.

The Project also introduced and provided trainings drawn from the toolbox called "Enhancing Qualities of Industrial Policy" – EQuIP (developed by UNIDO and GIZ), which offers a range of methodologies to consider for industrial diagnosis and strategy design. The EQuIP toolbox provides a comprehensive set of instruments to analyze industrial data including social and environmental dimensions to develop dynamic evidence-based industrial policies.

Speaking at the workshop on project closing and presentation on the White Paper held in Hanoi today, the Vice Minister of Industry and Trade Mr Do Thang Hai stressed the significant contributions of the White Paper. He said: "The White Paper's recommendations have been delivered timely when the Government is developing its new industrial development strategy to further facilitate the industrial production through enhancing industrial restructuring with a focus on manufacturing industries and subsectors while improving the policies to boost domestic production, to develop supporting industries and to increase localisation rates." (to be changed and cleared by VIA).

UNIDO's mandate is to assist its member states in achieving inclusive and sustainable industrial development (ISID). Boosting the industrial development strategies and policies of Viet Nam through institutional capacity building (conducting training courses), designing industrial reports for public and private sector (by new capacity, after reviewing internationally developing experience), proposing sub-sector strategy and particular policies to enhance its industrial competitiveness is one of UNIDO's efforts in close cooperation with the Ministry of Industry and Trade.

UNIDO Country Representative Ms Le Thi Thanh Thao said at the workshop: "UNIDO is very honored to provide technical support to the Ministry of Industry and Trade to help further consolidate industrial policymaking capacity to close its institutional gaps and the bottlenecks in the policy frame; build capacity in industrial intelligence focusing on sector competitiveness and value chain analysis; and share industrial development expertise and policies from such industrialized economies as the Republic of Korea. We hope that UNIDO's EQuIP toolkits and the recently launched Industrial Analytics Platform will be further used as the tool to formulate and design evidence-based strategies and policies for inclusive and sustainable industrial development."

For his part, the Commercial Attache from the Embassy of the Republic of Korea in Hanoi, Mr Kim Eui Joong, shared his view with Ms Le Thi Thanh Thao by saying that the Republic of Korea is very happy to share its industrial development experience with Viet Nam. He said: "We congratulate the Ministry of Industry and Trade and UNIDO for their successful collaboration and the design of the Viet Nam Industry White Paper 2019, which aims both at suggesting ways to build on current strengths while addressing challenges, paving the way to avoid a lower-middle income country trap, and for climbing up the ladder towards more industrialized economies. The Republic of Korea is ready to continue to share our experience with Vietnam in general and with the Ministry of Industry and Trade in particular." (Subject to be changed and cleared by the Embassy)

UNIDO Competitive Industrial Performance (CIP) Report 2018 assesses and benchmarks industrial competitiveness across economies, providing valuable information on the strengths and of weaknesses in national manufacturing sectors. It provides an indication how the manufacturing sector can play a key driver of a country's economic growth.

According to UNIDO CIP 2018 index, Viet Nam ranks 42nd globally and 5th among the south and south-east Asian countries. This shows a remarkable rise from the 69th position in 2006. However, Viet Nam's manufacturing value added in 20166 was 14.3% of the GDP, a decrease from 19.4% in 2006. The figure for the south east Asian region was 20.9%.

UNIDO CIP index is crucial to policymakers, as competitive industries drive the process of structural change, which development depends on. By promoting competitiveness, it is possible to maximize economic efficiency in the allocation of scarce resources while generating greater prosperity for the population. Therefore, UNIDO hopes that the White Paper's policy recommendations will be incorporated in the Government's industrial strategy and policy development in order to strengthen the role of the manufacturing sector.

Note to Editors:

1. Project: "Support to the Government of Viet Nam in the formulation of Sub-Sector Industrial Strategy and of the related Implementation Policy through Institutional Capacity Building"

• Donor: Ministry of Foreign Affairs of the Republic of Korea
• Estimated total budget: US$ 980,000
• Executing agency: UNIDO
• Line agency: Viet Nam Industrial Agency, Ministry of Industry and Trade
• Project duration: 2016 – 2019

2. EquIP Toolbox: The EQuIP toolbox offers stakeholders a range of methodologies to consider for industrial diagnosis and strategy design in their countries.

• Further information about the toolbox: http://www.equip-project.org/toolbox/

3. UNIDO Competitive Industrial Performance (CIP) Report 2018:

• Further information about the Report: https://www.unido.org/sites/default/files/files/2019-05/CIP_Report_2019…

4. UNIDO's Industrial Analytics Platform:

• This platform provides readers opportunities to explore global trends in manufacturing; compare manufacturing performance across countries and analyze participation of industries in global production networks. Check the link for information about Viet Nam: https://iap.unido.org/country/VNM

For further information, please email to:

• Ms. Le Huyen Nga, Vietnam Industry Agency: ngalh@moit.gov.vn
• Ms. Hoang Mai Van Anh, UNIDO Vietnam: V.Hoang-Mai@unido.org