Exports need quality breakthroughs Exports notched up enormous success in 2013, contributing to macroeconomic stability and a supply-demand balance. In the long-term, however, they require dramatic quality improvements. Growth exceeds expectations The Ministry of Industry and Trade reported Vietnamese exports improved 15.4% to total US$132.17 billion in 2013, 10% higher than the annual target set by the National Assembly. The domestic sector accounted for 33% of the total (up 3.5%), while the foreign direct investment (FDI) sector excluding crude oil contributed 61.4% (up 26.8%). Twenty-two export commodities recorded trade values above US$1 billion each. Vegetables and fruits crossed the US$1 billion export threshold for the first time, a positive signal for the agricultural sector. Exports to the Americas enjoyed the highest growth. Exports have undertaken restructuring in response to industrialisation and the 2011–2020 import-export development strategy and with a vision for 2030. Industrial processing products accounted for 71% of exports (up 6%), followed by agro-forestry and fisheries products’ 15% (down 3%) and mineral fuels’ 7% (down 3%). Mobile phone handsets and components finally surpassed garments with 69.2% export growth, US$21.5 billion in earnings, and accounting for 16% of total export value. Domestic businesses showed signs of recovery with export growth of 3.5%—higher than 2012’s level of 1.2%. Vietnam managed to record a trade surplus for the second consecutive year, actually increasing the surplus from US749 million in 2012 to its current US$863 million. Vietnamese products are now available in almost 200 countries and territories. MoIT Minister Vu Huy Hoang says the results are particularly impressive considering present economic difficulties that include price declines and restricted markets. The best performing commodities included garments, footwear, wood and timber products, computers, and electronics and components. Hoang cites these results as demonstrating expanded production capacity and the structural shifts in Vietnam’s exports. Quality must be improved Exports were a major influence on sustained macroeconomic stability but the most successful commodities deserve more than their ideal share of the credit. The garment sector’s dependence on imported materials remains a problem. Domestically sourced materials account for just 40–45% of the sector’s demands. It must seek to connect businesses in material supply chains capable of accommodating sustainable development. Agro-forestry and seafood products fell in terms of both prices and volume. Four of the seven key export commodities—cassava, coffee, rice, and tea—decreased in volume alongside a drop in cashew nut, pepper, and rubber export prices. Mobile phone handsets and components, garments, computers, and electronics and components were once again the best performers. The FDI sector’s trade surplus is approaching US$14 billion. Its pleasing export growth was unfortunately inefficient because of its reliance on manufactured and assembled products with low added values. Most exports rely heavily on imported input materials as the Vietnamese support industry is still in its infancy. Manufactured and assembled product imports are expensive. Despite its growth, the industry and trade sector has yet to achieve breakthroughs in sustainable development. VOV