The regional and global economy underwent swift and complex proceedings in 2020 due to the critical impacts of COVID-19. Leveraging the drastic and clear-sighted leadership of the Party and the government, Vietnam steered through turbulent times and secured major achievements in a year deemed as the most successful in the country’s socioeconomic development plan for the 2016-2020 period.
Last year also marked tremendous efforts in industry and trade to fulfill the tasks assigned by the Party, the National Assembly, and the government, making significant contributions to achieving the country’s socioeconomic development targets in 2020. Here are the 10 top highlights of the year.
1 – Breakthroughs in international integration
International integration was a brilliant highlight of industry and trade activities in 2020. Never before had Vietnam in a single year joined three major free trade agreements (FTAs) of an unprecedented market size – the EU-Vietnam FTA, the Regional Comprehensive Economic Partnership (RCEP) and the UK-Vietnam FTA – bringing the total number of FTAs involving Vietnam to 14.
According to experts, through constant and profound tariff cuts, the FTAs connect Vietnam to a large playing field with GDP value accounting for 60 per cent of the global GDP.
In 2020, as ASEAN chair, the Ministry of Industry and Trade (MoIT) presided over, initiated, and crafted 13 initiatives for economic cooperation that were highly appreciated by other ASEAN member countries. The initiatives help strengthen intra-bloc cohesion and restructure regional supply chains in a sustainable manner.
Despite facing mounting hardships due to COVID-19, Vietnam worked closely and proactively with ASEAN members and other partner countries to solve hurdles and finalise the 8-year negotiations over the RCEP while simultaneously scaling up efforts to review the legal impacts of the agreement. In addition, Vietnam had quickly completed local procedures to successfully organise the signing ceremony of the agreement in November.
2 – Exports maintain growth momentum
Vietnam, with trade openness in the range of about 200 per cent of GDP, is regarded one of the most open economies in the world. The declining global economy due to COVID-19 therefore has cast detrimental impacts on the country’s exports, particularly from the early second quarter of 2020.
In this context, the MoIT swiftly deployed a wide range of measures to remove difficulties for exports. Shortly after COVID-19 erupted in China, the MoIT proposed the Ministry of Health to build pandemic control protocols to apply at the northern border gates. Simultaneously, the MoIT sought to diversify component supply sources to ensure domestic production and export growth.
Being able to resume production early brought distinct advantages to the country in preparing sources for exports. The MoIT and relevant ministries and agencies have been tracking the domestic and overseas market situation to render timely guidance in each particular field.
Last year, 31 of Vietnam’s export markets reported more than $1 billion in export turnover with five markets reporting over $10 billion, and eight markets between $5 and $10 billion.
3 – Trade remedies
New investigations on trade remedy measures on Vietnamese exports set a record in 2020 with 39 cases, up 2.5-fold compared to 2019. The MoIT effectively solved cases of trade remedies being applied to ensure the legitimate rights and benefits of Vietnamese exporters and producers.
So far, Vietnam successfully handled 65 cases, helping many export businesses and export items to continue to enjoy zero per cent or very low tariffs and maintain export growth, particularly to big markets like the United States, the EU, and Canada.
4 – Market management undergoing restructuring
Market management bodies have proven remarkably efficient in the fight against counterfeit, smuggled goods, and trade fraud. The teams have successfully detected crime rings that had been operating under the radar for years.
Numerous cases of smuggling, counterfeit, and trade fraud were founded and properly settled in localities nationwide. Particularly, market management forces made active contributions to the COVID-19 prevention won praise from the government and citizens.
5 – Manufacturing and processing a major stimulation to growth
The manufacturing and processing industry continues to be a driving force for industrial growth with important contributions to the country’s economic development, ensuring social wellbeing and employment.
Albeit the regional and global economy was hit heavily by COVID-19, Vietnam’s industrial production still registered growth with continuous expansion in production scope.
Significantly, industrial restructuring has been gathering increasing momentum, with key industries like electronics, textile and clothing, and footwear growing at a high level and being a major factor for Vietnam’s industrial development, creating more jobs for society (averaging 300,000 jobs a year on average) and helping to improve the competitiveness of Vietnam’s industrial sector.
The MoIT submitted to the government Resolution No.124/NQ-CP dated last September on the action programme to implement Resolution No.23-NQ/TW dated March 2018 of the Politburo presenting the orientation to build a national industrial development policy towards 2030 with a vision to 2045 and Resolution No.115/NQ-CP dated August on solutions to accelerate supporting industry development.
6 – Upbeat results in oil and gas exploration
The first gas stream from the Sao Vang-Dai Nguyet field in Nam Con Son Basin got to the shore on November 16, 2020, opening up an annual output of about 1.5 billion cubic metres of gas and 2.8 million barrels of crude oil and condensate. The gas source from the Sao Vang-Dai Viet field will contribute significantly to the national coffers and the economy, ensuring sufficient gas supply for power production.
Last July, a colossal gas deposit of an estimated 7-9 trillion cubic feet of raw gas was discovered at the Ken Bau field in Song Hong Basin, offshore Vietnam. With this discovery, the Ken Bau gas field might be ready for exploitation in the second half of the decade, contributing to national security.
This provides a substantial bedrock for continued exploration and exploitation activities at Block 114 of the Ken Bau field and neighbouring areas, gearing towards the robust development of the gas-fired power industry in Quang Tri, Thua Thien-Hue and the central region.
7 – Consolidating domestic markets and providing firm ground for manufacturing
Shortly after the pandemic outbreak, the MoIT worked closely with localities and presented plans to ensure good preparation of commodities along with setting diverse scenarios to effectively deal with any pandemic situation.
As a result, the market could ensure sufficient supply of essential goods serving people’s needs in all contingencies, especially amid the subsequent disruptions.
In addition, diverse initiatives were deployed with massive programmes on sale and trade promotion with strong spillover effects, helping to quickly resume purchasing power and regain growth. For instance, retail sales of goods still jumped 6.78 per cent.
The MoIT also presented measures and crafted policies to support businesses on product consumption, particularly agricultural produce, and essential consumer goods.
These achievements were of paramount importance, providing the lever for domestic production to weather the storm, gradually resume pace, and push up growth.
8 – Innovating trade promotion
Due to difficulties in trade promotion activities, the MoIT quickly deployed new forms of trade promotion in the digital platform to supersede traditional methods. The ministry used social media platforms to ensure frequent and swift connection between Vietnamese commercial agencies abroad and local trade promotion organisations, suppliers, and exporters.
From early 2020, the MoIT worked in tandem with the people’s committees in centrally-governed cities and provinces throughout the country, as well as foreign trade promotion agencies to host more than 500 online international conferences with over one million transaction sessions.
In December, the MoIT held the Vietnam Food Expo online, as well as supported local businesses in taking part in dozens of other online international trade fairs.
9 – E-commerce developing robustly
Last year e-commerce became a strategic move for many businesses, helping them to develop new distribution channels effectively. E-commerce, therefore, experienced booming growth right after border trade bounced back.
Different e-commerce platforms like KeyPay, ERP Store, and the Online Friday event were utilised effectively, boosting Vietnam’s e-commerce industry as a whole.
10 – Administrative procedure reform and building e-government
Along with a sharp rise in the access-to-power index, administrative procedure reform and simplified business condition and check procedures were the MoIT’s highlights in 2020.
The ministry piloted slashing business conditions through submitting to the government for enactment a decree to help trim and simplify 205 business conditions in the fields under its management. After two revisions, 880 of a total of 1,216 conditions were scrapped.