Under the strategy approved by the Prime Minister earlier this month, Vietnam has defined six industries that will be prioritized for development in the near future as they are key to the national economy.

The six industries are electronics, agricultural machinery, agricultural and seafood processing, ship building, the environment and energy saving and the manufacture of cars and spare parts.

These industries can stimulate domestic and foreign investment, especially from Japanese enterprises and spread ‘technological seeds’ to other industries and the economic in general.

At the first policy meeting between the Ministry of Planning and Investment and the Japanese Business Federation, Keidanren, held in Hanoi on July 23, it was stated that liaising closely with Japan will help to speed up the industrialization process in Vietnam, especially as the country has targeted becoming industrialized in 2020.

With roughly 2,000 investment projects worth nearly US$33 billion operating in Vietnam, Japan tops the list of 101 nations and territories investing in the country.

Over 83% of their investment focuses on processing and manufacturing industries, where Vietnam is keen to attract more foreign direct investment.

The head of the Central Institute for Economic Management, Le Xuan Ba, said that the six priority industries could create a breakthrough in attracting even more FDI, especially from Japanese investors.

They will also help to change the structure and the different industrial models in Vietnam, which would help the country’s economic restructuring, he said.

The joint chairman of the Japan – Vietnam Economic Committee, Takahashi Kyohei, said that ESEAN member countries were committed to developing an ESEAN Economic Community as a single market and production base by 2015 and Vietnam will be at the heart of the market’s supply chain.

Japan is already committed to assisting Vietnam to boost its support industries, which are the foundations of industrial development, but this did not prove to be as effective as expected.

He said that the firms involved in support industries are mainly small and medium sized, and will not invest any capital unless they saw a prosperous outlook.

“The approval of the industrialization strategy with its six prioritized industries encourages investors and gives us a clearer vision on how to work together and what to invest in,” he said.

Minister of Planning and Investment Bui Quang Vinh, said that governments and companies in both countries were making a lot of effort to improve the investment climate in Vietnam, including proposing support policies or solutions for existing problems.

In the past, Vietnam failed to put together an effective automobile and spare parts manufacturing strategy, said Vinh, blaming a lack of development in the country’s support industries and the incompatibility of goals and policies, which include complex regulations, high taxes and fees. For example, motorbikes can be seen as luxury goods, but cause still traffic congestion.

In the near future, the country will focus on solutions for these two issues, while ensuring the investment climate is much more transparent.