Sat. Jan 28th, 2023

Trade groups found lacking

HA NOI (VNS)— Hampered by a lack of resources, Viet Nam’s business associations are struggling to attract new members and come up with long-term plans for growth.

Currently, the country has almost 400 business associations, including 28 at the national level and 50 at the provincial level, said Viet Nam Chamber of Commerce and Industry (VCCI) chairman Vu Tien Loc.

During the country’s shift from a centralised to a market economy, these associations helped protect the rights of enterprises and act as links between the business community and Governmental agencies.

However, he said, their capacity was still limited, in large part because there was no legal framework governing their actions.

At present, the associations attracted less than ten per cent of enterprises in particular industries or localities. Ten associations reported that membership had been steadily decreasing.

One reason is the associations’ lack of long-term strategies for growth. Among 78 associations that participated in a survey conducted by the (VCCI), only 23 had development strategies. Two others are currently creating strategies, while the rest lack any kind of cohesive plan for the future.

Worsening, only 11 percent of the strategies were publicised and a mere 16 percent were sent to the associations’ partners and relevant agencies.

Even though the survey indicated that having a clear development strategy would pave the way to growth, Vietnamese enterprises often fail to see the value in making such plans.

Moreover, many associations – particularly in the export-import sector – have not fulfilled their duties in protecting the rights of members, said Dr Pham Van Chat, arbitrator at the Viet Nam International Arbitration Center.

When a Singaporean company sued a Vietnamese rice exporter for US$1.4 million in 2010, Chat tried to contact the chairman of the Viet Nam Food Association seven times but received no reply.

And associations rarely considered the needs of members or the market in deciding what services should they provide, the survey found.

Only 17 per cent of surveyed associations conducted studies on market demand and customer needs when planning activities, barely 24 per cent consulted member enterprises – and a scant 28 per cent considered their services useful for members.

Dau Anh Tuan, deputy head of the VCCI Legal Department, said that in many anti-dumping and anti-subsidy cases, most business associations were not capable of assisting their members – even though “the role of associations has become increasingly important” in such cases.

Only a few associations with experience in anti-dumping lawsuits, like the Viet Nam Association of Seafood Exporters and Vietnam and the Viet Nam Leather and Footwear Association, were able to help their members, he said.

Local associations were stuck in a vicious cycle, according to Tuan, as a lack of money and materials made it hard for associations to attract skilled personnel.

Without skilled personnel, associations are not able to offer professional services that would attract new members. Failure to draw new members resulted in further capital shortages – thus limiting opportunities for growth. — VNS

By vivian