Vietnam textile sector calls for strategy update
Vietnam's textile and apparel industry is growing at a faster rate than the government's target
Vietnam's apparel and textile industry is calling on the country's government to revise its "out of date" 2020 development plan with a vision that will match the country's progress and improve its competitiveness.
The current plan, which was approved in April 2014, forecast Vietnam's garment exports reaching between US$20bn and $25bn by 2020. In 2015 they reached $27.5bn thanks to businesses taking advantage of potential opportunities of trade agreements such as the Trans-Pacific Partnership (TPP), the Vietnam-Korea Free Trade Agreement (VKFTA) and the Vietnam-EU Free Trade Agreement (EVFTA).
According to the Vietnam Textile and Apparel Association (VITAS), based on the sector's current growth, export turnover is expected to reach between $40bn and $50bn by 2020.
Speaking at an Enterprise Vietnam conference late last week, Vu Duc Giang, chairman of VITAS, suggested the government adjusts its planning for the garment and textile sector to 2035-2040. He told delegates the current plan was "so far out of date already" and the government needs to help the industry progress in line with the country's economic development.
He also proposed the government initiate policies to attract investments in the textile sector, including high-quality fibre production and dyeing projects in industrial parks or key economic zones. At present, the sector relies on importing high-quality fibre for manufacturing export products, at a cost of $15bn in 2015.
Referring to the current competitive environment, Giang said that in the first quarter of 2016 alone, a number of customers moved orders to Myanmar and Laos. And with the prospect of losing more orders to other countries, Giang proposed a change to the policy on minimum wage, such as the lowering of insurance rates to attract more business.
"We need to adjust this solution, otherwise we will not compete with other countries in the region," he said.
Giang also said the government needed to invest in infrastructure development as well as create incentives for investors, with special attention to production units, textile fibre and threads, and dyeing. VITAS suggested there should be greater encouragement for investment in international quality waste water treatment plants.
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