Vietnamese businesses complain public procurement favors foreigners

Government agencies prioritize foreign salesmen bearing gifts

Though it calls on citizens to show their patriotism by using Vietnam-made goods, the biggest consumer of all, ironically, has not given prioritiy to purchasing Vietnamese goods. While that’s the case, It is really difficult to persuade people that patriotism requires preferring Vietnamese-made goods – not when they see imported tea sets in officials’ living rooms or the shirts provincial chairmen wear or the cars that carry them.

At a recent workshop on to promote the sale of Vietnamese goods and stimulate domestic demand, the organizing board gave every participant a made-in-China pen.

Economist Le Dang Doanh says it’s evident that the ‘Buy Vietnamese goods’ campaign should not only target consumers, but also producers and policymakers.

Statistics show that the state accounts for 43 percent of the total spending and is the biggest client in the national economy. However, domestic producers find it hard to sell to the biggest client. Those with the power to make purchasing decisions don’t favor them, and it is because of ‘red roses’ – a word the dictionary says is a slang word for commissions but which could be more properly translated as ‘kickbacks.’

Economist Bui Kien Thanh points out that because of such ‘commissions,’ a lot of government officials choose to import old technologies at high prices instead of using home-produced technologies with lower costs. With limited financial capability, it is obvious that Vietnamese companies cannot compete with foreign companies in providing the ‘commissions’ needed to persuade leaders of government agencies use their products and refuse others. Especially, domestic manufacturers have been defeated in the fields of pharmaceuticals and nutritional supplements.

Many physicians choose to prescribe expensive foreign made medicine and dairy products for their patients instead of Vietnamese-made products, even though the Vietnamese-made products are cheaper and have quality equal to foreign products. It is because the physicians can get higher ‘commissions’ if they prescribe foreign made medicines.

Nguyen Van Thu, Chairman of the Vietnam Machinery Makers Association, said that he is thoroughly discouraged when he sees many state budget-funded projects refusing to consider made-in-Vietnam goods. “We (Vietnamese contractors) can’t even get hired as sub-contractors in big projects. Foreign contractors even bring to Vietnam common laborers,” Thu said.

There’s a good argument, therefore, that government agencies need to take the lead in the “Buy Vietnamese goods’ campaign. Only when government agencies give priority to Vietnam-made goods will Vietnamese people seek out Vietnamese goods to purchase and prefer to check into Vietnamese-run hotels like South Koreans and Japanese typically do. It’s not realistic to expect ordinary citizens to show their patriotism by purchasing Vietnam’s goods while government agencies and officials who spend money from the state budget do not do that.

 Our policies only target exports

At a time when people across the country are discussing about the Party Politburo’s call to give priority to Vietnamese goods, an official from the Ministry of Industry and Trade told reporters: “exports are still the priority”. He may have been right, but it seemed to be a singularly inappropriate remark. When asked about local economic development, government officials spout statistics about export revenues and total foreign direct investment.

Vietnam now has the Trade Promotion Agency, part of the Ministry of Industry and Trade. The trade it promotes, on which it spends money, however, is only exports. For many years, the garment industry has only targeted exports.

Garment companies ignored the domestic market. They only thought about selling at home when export markets shrunk due to the economic crisis. Vietnam is now listed among the world’s top ten garment ‘arsenals.’ Our companies can make apparel to the taste of American, French and Japanese people, but only now have they begun to make clothes that fit Vietnamese people. While Vietnamese enterprises try to seek new export markets, foreign producers are attempting to conquer Vietnam’s market, the potential market with 85 million consumers.

Regarding the investment policies, Director of Intimex, a retailer, Pham Ngoc Quy said that he is so jealous of Metro, because the foreign retailer can get corporate income tax incentives, while domestic retailers cannot. Domestic investors in many other sectors may agree with Quy that provincial authorities now seem to prefer to attract foreign investors than domestic ones.

In a recent talk with reporters, a leader of a province frankly said that foreign investment in provinces will help make the achievements of the locality brighter. As the result, a big part of the consumer product’s market has fallen into the hands of foreign brand names like Unilever, P&G, Coca Cola and Pepsi. Meanwhile, the one-time famous brand names like Ngoc Lan, Lux, or Daso have given up the market to the powerful brand names.