Export management needs to be professional

 Vietnam is developing an export-driven market economy and exports make up more than half the country’s total gross domestic product (GDP). However, poor management affects the efficiency of export activities and muddies the image of businesses and their products.

Globally, many growth targets have been adjusted as a result of the global economic crunch. In Vietnam, economic experts have considered three scenarios for the country’s GDP growth rate and accordingly the export value will fall by 7.2, 12.2 and 25.5 percent respectively. By and large, in every case exports will decrease considerably compared to previous years. Meanwhile, export management has revealed weaknesses and lacked professionalism.

The recent export of Tra fish and rice has taught managers valuable lessons. It’s worth remembering that not long ago the export of high-quality Vietnamese fish products to several key markets was halted after some businesses were found to have shipped a small amount of Tra fish abroad that did not meet with quality standards. Though the fraud was later brought to light, thousands of fish farmers and genuine export businesses incurred huge losses. This also showed the poor capabilities of the agencies that are assigned to scrutinise the quality of exports.

The recent discord in the management of rice exports is another case in point. The rice exporters association instructed its businesses to suspend rice deliveries to their importers under contract, reasoning that the halt was to ensure national food security. In an interview granted to the media, Deputy Minister of Industry and Trade Nguyen Thanh Bien also agreed that exports should be suspended as they were already going through the roof.

By then, however, few people knew the exact volume of rice that had been exported. Businesses that missed delivery deadlines said publicly that there was someone acting in the name of the association to protect their own interests.  

Once the problem had been solved, the importers turned to other exporters, prompting the price of Vietnamese rice to fall and tarnishing the image of many Vietnamese businesses. Most recently, the association again proposed increasing the volume of rice for export.

These days, businesses in the south are rushing to purchase fruit, especially longan berries, for export, creating a scarcity of fruit on the domestic market and driving up prices. However, this situation is likely to reverse as the fruit will be ready for harvesting in several weeks’ time. This is a common occurrence to Vietnamese exporters of agricultural products in particular.

There is no denying that the efficiency of exports is directly and indirectly associated with the interests of producers, businesses and the national economy as a whole, as well as the country’s trade balance. This requires managers not to maintain export activities in an unstable and spontaneous manner.

The rice exporters association defended its argument, saying that it was no-one else’s business. Whatever the reason, it is unacceptable if the association’s management affects the export abilities of its businesses and the entire economy.

Steel and fertiliser are no exception. When the domestic demand for steel and steel ingots was slack with large volumes in stock, businesses decided to market the products abroad to make a profit. Similarly, fertiliser businesses were also criticised for jumping to unwise decisions. 

To judge the situation from another angle, who will compensate steel and fertiliser businesses that are paying interest on bank loans when their products are not strongly promoted domestically?

In a market economy, it is difficult for state agencies to interfere too much in business operations. More often than not when the global market starts to shrink, a fall in exports will ensue. This requires businesses to seek ways of quickly adapting to market changes. However, comprehensive administrative reform is a decisive factor behind business success. According to the Central Institute for Economic Management, weaknesses in the country’s administrative system are still the biggest barrier to forming a healthy and transparent business and investment environment. There is no doubt that accelerating administrative reform will help to boost exports and economic growth.