Expert: Vietnam ‘needs to better prepare’ for TPP

The government must adequately prepare local businesspeople for the Trans-Pacific Partnership (TPP), said Nguyen Tran Bat – engineer, lawyer and now Chairman and General Director of InvestConsult Group.

The history of InvestConsult Group shows that it has been closely linked with the ‘Doi Moi’ or all-round renovation process since its inception in 1986 and Mr Bat one of the leading intellectuals in the country when it comes to economic issues.

With over 23 years of development, InvestConsult Group nowadays has become the leading professional group of consulting companies in Vietnam with multi-industry services such as investment consultancy, business law, intellectual property, development and management.

The firm employs over 40 lawyers, 150 full-time staff and more than 100 collaborators working out of its head office in Hanoi and southern office in Ho Chi Minh City with branches in many provinces around the country.

The TPP is a US-led trade agreement between 12 Pacific Rim countries aimed at rebalancing their strategic strength over global trade and the economy. They currently cover 40% of the global economy.

Following are key translated excerpts capturing the gist of a recent interview Mr Brat provided a Voice of Vietnam (VoV) reporter in which he discussed in detail his thoughts on Vietnam’s preparedness for the TPP and integration.

VOV: What do you think of some experts’ opinion that Vietnam will benefit the most from the TPP?

Mr Bat: We should not focus on what benefits there may potentially be but carefully consider what work we have to undertake to prepare and strive to turn these potential benefits into reality.

Vietnam is getting equal opportunity on the same footing as all of the other partners to the accord.  There are no extra benefits for Vietnam.

VOV: What does ‘getting equal advantages’ mean to our country?

Mr Bat: The free market created by the TPP is open and equal for all participants. All of the respective nation’s economies must benefit if the trade region is to be healthy and the benefits for all to be maximized.

VOV: Given Vietnam’s current economic situation, how should the nation go about realizing opportunities when the TPP is effective?

Among the 12 TPP member countries, Vietnam is at the bottom of the list in terms of economic institution development. The government has diligently been focused on economic restructuring, particularly institutional reform.

However, methods are not clear enough yet and this process needs to be completed

VOV: Does the TPP create an opportunity for Vietnam to carry out comprehensive reform, especially economic institution?

Mr Bat: We must keep in mind that the real benefits of the TPP do not stem from government activities, but they come from the free market approach and mechanisms that develop and maximize the nation’s economic capacity.

Vietnamese must be intelligent consumers, having knowledge to choose goods. Intelligent consumers create intelligent producers who in turn make high-quality products with high added value.

The nation’s production must also be creative to obtain high growth. Currently, Vietnam’s public debt is high because the country had to spend considerably on investment in infrastructure.

But this investment will pay huge rewards in the future as it will maximize production for future generations of Vietnamese.

VOV: People say integration largely benefits big businesses at the expense of small businesses. How should State leaders think of the issue?

Mr Bat: I don’t think that integration only benefits big businesses but provides opportunities for both big and small businesses alike.

Take Italy for example. Italy is one of the G7 members. Its economy has a handful of large dominant powerful groups along with very large numbers of small and medium sized businesses.

Each business goes to the market with different purposes. Big businesses get into providing goods and services that benefit from economies of scale such as wholesaling, while small businesses are more adept in areas such as retail.

We should train small Vietnamese businesses to compete with strong ones.

That’s a message I want to send to businesspeople.

VOV: Do you mean the business community plays an important role?

Mr Bat: Integration transfers the burden from the government to the business community.

Only when our society starts to realize that all integration’s burdens are put on businesspeople and producers, will Vietnam’s markets transform into a real market economy.

VOV: Some economic experts say the most important challenge facing Vietnam businesspeople is that they do not make full use of opportunities free trade agreements offer. What do you think of this?

Mr Bat: It’s true. The biggest risk is that Vietnam does not seize opportunities. Vietnamese have equal opportunities as others in the region. We do not grasp opportunities so we lag behind.

We must change in order to turn our rivals into alliances. It means we should turn foreign investors into alliances in the integration process.

VOV: Thank you very much

VOV