The challenges awaiting Vietnam's new minister of industry and trade

By Ky Duyen   April 9, 2021 | 07:34 pm PT
The challenges awaiting Vietnam's new minister of industry and trade
Newly-appointed Minister of Industry and Trade Nguyen Hong Dien. Photo by VnExpress/Giang Huy.
Many of the Ministry of Industry and Trade's achievements in the previous term have become challenges for its minister Nguyen Hong Dien, a newcomer to the portfolio.

Unlike other newly appointed ministers, who have already spent time in their ministries, Dien took office as an outsider without any such experience.

He had earlier worked in culture and propaganda and was a leader in the northern Thai Binh Province and of the Youth Union.

The 56-year-old trained in finance, accounting and public administration, and has more than a decade’s experience in administration in Thai Binh, unlike most other ministers who often only have one or two years’ local experience.

But this might not be the major problem awaiting him: That honor might fall to the yeoman work his predecessor did and he is expected to continue.

Tran Tuan Anh, the previous trade minister, took advantage of the various free trade agreements Vietnam has signed such as the CPTPP, EVFTA and RCEP and managed to push exports to unprecedented levels.

Last year, even amid the Covid-19 pandemic, the country's exports sustained their recent high growth rates and were worth US$281.5 billion.

Dien clearly has a hard act to follow.

According to analysts, the contribution of local companies to Vietnam’s exports remains low with foreign-owned ones accounting for around 70 percent.

Speaking to VnExpress, a former advisor to the industry and trade sector, who asked not to be named, said one of the many tasks Dien has is to come up with a breakthrough strategy for industry.

"The value added in manufacturing after all these years is still very low as it is mostly processing. A country’s industry cannot rely on the import of raw materials and the domestic component of value added is still too low."

Since Vietnam seeks to become an industrialized country by 2030 after having missed its earlier deadline of 2020, now is the time for industry to achieve a breakthrough, the expert said.

Tran Hoang Ngan, head of the Ho Chi Minh City Institute for Development Studies, expressed the hope that Dien would make good use of the opportunities and benefits brought by free trade agreements.

Only then would it be able to entrench itself in the global supply chain and increase value added and national competitiveness, he said.

One immediate task for the new minister is consolidating the domestic market and improving the quality of products so that the Vietnamese people could get the best products, he said.

The recent Covid-19 outbreaks have shown that the domestic market is a lifesaver for businesses.

Another ticklish issue passed down to Dien is that of electricity planning and how to avoid the pitfalls of the previous plans.

The highly anticipated eighth plan, the National Electricity Development Plan for until 2045, has been drafted, but there are still concerns about whether this massive plan could be achieved.

It forecasts that for the next 25 years Vietnam would need nearly $13 billion annually so that it could triple its current power generation capacity.

But it has yet to indicate where this money would come from.
Furthermore, the recent boom in solar and wind power has seen their output far exceed plans and put great pressure on the national grid, frustrating investors.

While development of renewable energy is the right way to go, its implementation has caused it to become a bottleneck in the power system.

A power industry executive lamented: "Operating the power system when there is an electricity shortage is difficult, but now that there is an oversupply it has become many times more difficult." The task of easing the solar and wind power boom requires fresh thinking from the ministry.

With his experience in running administrations in localities, which are directly affected by industry and trade policies, for over a decade, Dien is expected to efficiently address this issue.

Besides long-term strategic issues, Dien also faces many immediate issues such as commercial fraud, adulteration of gasoline and the mushrooming of gas stations with poor government oversight, ministry projects that have incurred millions of dollars in losses or stalled for years.

Last but not least, the minister also faces pressure to continue with administrative reforms and resolve internal issues.

Dien was appointed trade minister on Thursday, one of 12 new ministers and department heads named by the new government.

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