Trade deficit rising at an alarming rate
The Deputy Minister of Industry and Trade, Do Huu Hao, says that 2009 saw the lowest level of industrial output on record in 10 years. In recent months, many businesses had to increase the import volume of liquefied gas by 35.7 percent, petroleum-related products by 8 percent and pharmaceutical materials by 43.1 percent.
In the meantime, import revenues were rather high in some commodities such as food and foodstuffs (US$1.12 billion), mobile phones (US$747 million) and cosmetics (US$130 million).
Excluding cars, the country imported nearly US$5.7 billion worth of products in the first 10 months of 2009.
Vietnam’s exceptionally high trade deficit has been chalked down to a continuing decline in exports since the beginning of this year. For instance, contracts for timber exports decreased by 10 percent in value due to pressure from foreign importers. As a result, the turnover from the export of wooden furniture only made US$2.6 billion in the first 11 months of 2009, a drop of US$200 million over the same period last year.
Many other industries fared no better, like textile and garment manufacturers which could sign export contracts but in a disadvantaged position.
Given this, the Ministry of Industry and Trade has introduced several solutions to curb the trade deficit, including increasing exports in the last few weeks of 2009. But many experts maintain that this will not change the situation; the bottom line is there should be a longer-term vision to solve the problem.
The director of a major company that imports Korean cars say that the new barriers set up by the country against imported cars have caught businesses off guard. As a point of fact his company and other firms have already signed contracts to import cars and many of these are on the way to Vietnam. Adding to the problem is an extended time needed for customs clearance that would impose higher taxes on the coming deliveries and cause substantial losses to importers.
Another car importer in Hanoi argues that it would be difficult for enterprises to go along with new, strict customs clearance procedures. For example, the import of second-hand cars now requires documents relating to all the previous owners, not only the most recent one.
In other words, the adjustment of import-export regulations should be done in a fair, reasonable and systematic way with a long-range vision.
