Stung by a recent slip down the Logistics Performance Index (LPI), Vietnam is rallying with a National Action Plan, a senior industry source told a Bangkok conference.
The plan is a holistic one to transform logistics in Vietnam in the course of the next decades and incorporates 60 initiatives. Dropping from the 53rd position in the World Bank LPI between 2007 and 2012 to 64 was a shock to the government, Le Duy Hiep, chairman of the Vietnam Logistics Association told the ASEAN+6 Connectivity Symposium.
The initiatives are spread over several fields grouped together as policies and legislation on logistics services, infrastructure, service provider capability and service quality, developing the logistics service market, developing human resources, and information and communication, Le said in his speech at the event.
The association is to work with government bodies in delivering the changes, although sometimes ministries will work alone or jointly. Importantly, timelines have been put in place to block backsliding.
A good example of this is the move to create a favourable legal framework, which has been given over to the Ministry of Industry and Trade and the Ministry of Justice. This should be in place by 2020.
By contrast, and one to watch now, the application of road tolls and charges at ports to facilitate logistic activities is the responsibility of the transport and finance ministries and should be in place this year.
Reform of customs procedures, simplification of joint interline agencies inspection, record standardization and carrying out the commitments of the World Trade Organization’s Trade Facilitation Agreement begins now but runs through 2025 and will see the Ministry of Finance (and others) work with the Vietnam Chamber of Commerce and Industry.
There are no commitments on specific pieces of infrastructure, but a key initiative in this is to ensure all plans mesh and promote international cross border and intermodal trade. One of the few parts of the plan getting close to details is a move construct of transport work, warehouse and logistic centres on highways and corridors which will connect Vietnam seaports with Laos, Cambodia, Thailand and southern China.
The significance lies not in the bureaucratic outlines but in the fact, as Le pointed out, “for the first time [the government has issued] a new plan to develop a logistic industry in Vietnam.”
More tellingly, Le added it was the first time feedback from the logistics industry was taken. Planning has also seen a breakthrough, he said, in terms of the focus on training and human resources.
While much of the work will be done by the Ministry of Education and Training, logistics training will now be recognized and on the curriculum of universities. “Several intensive [logistics] research centres” will also be set up by 2023, with the association and the Ministry of Science and Technology leading the way.
Fostering this change was the World Bank, which quantified problems with infrastructure, capability and quality of logistics services, made it hard for government officials to dismiss the concerns.
Similar declines within ASEAN didn’t console the government.
In the period from 2007 and 2016, Indonesia dropped even more sharply in the LPI, from 43 to 63. Malaysia also moved downward 27 to 32, and the Philippines from 65 to 71.
Adding insult to Vietnam’s injury, neighbour and rival Cambodia in the same time frame moved upwards from 81 to 73.
The scale of the problems is clear, with Le acknowledging that Vietnam suffers from traffic jams and port congestion.
The government’s goal is not just to get back to where it was, but to get back into the top quarter of countries globally. “(We are) trying to be in top 50,” Le said.
By Michael Mackey
Southeast Asia Correspondent | Bangkok
