Report touts benefits of service sector liberalization

15:31 | 22/04/2019 Economy- Society

(VEN) - “The development of the service sector remains incommensurate with its pivotal role in the economy,” the Vietnam Chamber of Commerce and Industry (VCCI)’s WTO Center and Integration concluded in its recently announced research report on “Liberalization in the service sector of Vietnam”. 

report touts benefits of service sector liberalization
The tourism sector has contributed significantly to Vietnam’s GDP

The research indicates that the service sector accounts for 41 percent of Vietnam’s gross domestic product (GDP) - the highest percentage compared with other sectors. However, the average service sector contribution to the GDP of developing countries is about 50 percent and about 70 percent in developed countries.

The number of people working in the Vietnamese service sector has grown rapidly over the past decade, accounting for 34 percent of the total workforce. The number of companies operating in this sector is more than double that in the industrial and construction sectors.

However, the competitiveness of Vietnamese service providers is lower compared with those in the region and worldwide. Their export value remains modest and depends mostly on on-site tourist service exports.

The domestic service sector has attracted a large number of foreign investment projects. However, these projects concentrate mostly on real estate, accommodation and catering services, wholesale, retail, auto and motorcycle repair, but not services catering for production.

The tourism sector thrives due to globalization and has contributed significantly to Vietnam’s GDP, also generating jobs and incomes for related sectors such as transportation, banking and healthcare.

The research report recommends further specialized research and quantitative evaluation of the impact of service market liberalization on the development of the entire economy and on each area of the service sector.

The research also indicates that Vietnam needs to increase the degree of market openness in service areas, such as telecommunications, transportation, forwarding and banking, in order to create competitive pressure requiring domestic companies to improve service quality. Opening the service market also enables Vietnamese consumers to access quality services provided by foreign companies.

The “Liberalization in the service sector of Vietnam” research report assesses the impact of service sector

liberalization on the economy and recommends solutions to the Vietnamese government and foreign service

providers.

Quang Loc