Policy Learning for Executing
Industrial Strategies
International Best Practices in Policy Procedure and Organization

Kenichi Ohno
Vietnam Development Forum (VDF)
National Graduate Institute for Policy Studies (GRIPS)
February 2011

Methodological Problems ofVietnam’s Industrial Policy Making
1.

Coherent policy structure is lacking:Industrialization & Modernization – must be concretized
SEDP & SEDS – comprehensive, too many priorities
Overall industrial master plan – does not exist
Subsector master plans – electronics, automobile,
motorcycle, etc. not effectively implemented

2.

3.

Inter-ministerial coordination is weak – budget,
staffing, legal framework, etc. necessary forexecution are not provided.
Stakeholder involvement is weak – businesses do
not support implementation.

Ingredients for
Successful Policy Execution
1.
2.
3.
4.
5.

Leadership
National movement for mindset change
Policy measures
Policy procedure and organization
Policy structure—vision, strategy, actions,monitoring All these can be learned from systematic studyof international best practices

Learning from Other Countries
 It is NOT copying some policy adopted in someother country to Vietnam without local context.
Ad hoc or random copying should be avoided.
 The claim that “our country is unique” should not
be used as an excuse for not learning from others.
 Learn mindset and methodology for conducting
industrial strategies effectively. Learn how tomake policies.
 Early achievers (Japan, Korea, Singapore…)
improvised through self-effort and trial-and-error.
For latecomers, more systematic learning isdesirable.

Systematic Policy Learning
Purpose is to enhance Vietnam’s policy capability.
 Policy measures—what other countries do:collection and analysis of best practices for any
proposed measures (SME finance, industrial park
management, TVET-business linkage…)
 Policy procedure and policy organization—howothers draft and implement good policies.
 Strengthen capability to create policy package
suitable for Vietnam using foreign models asbuilding blocks – selectivity and adjustment
required.
 Policy scope should be expanded as policy learning
progresses – from simple to more difficult.

1. Leadership Importance of leadership quality cannot be

understated. National leader is the main driving
force of industrialization.
 Vietnam has collective leadership under one party.
This can assure stability but bold reforms andquick actions are more difficult to emerge.
 Window of opportunity—as the new government
is formed, top leaders should announce new
vision and strategies for 2020 and overcoming a
middle income trap.

2. National Movement for
Mindset Change Many developing countries suffer from weak

private sector response: Firms are too passive, waiting for customers orofficial support.
 Workers do not learn skills; job hopping is rampant.
 Short-term speculation is preferred over long-term
investment in manufacturing technology.
 If mindset doesn’t change spontaneously, state

may have to force it from the top until it becomespart of national culture.
 Forced movement is a double-edged sword. Somecountries succeed brilliantly but others fail. It must
be designed with knowledge and care.

Examples of National Movement
 Japan’s Rural Life Improvement Movement(1948-)
 Japan’s productivity/kaizen movement (1950s-)
 Korea’s Saemaul Movement (1970s-)
 Singapore’s Productivity Movement (1980s-),with Japanese assistance Malaysia’s Look East Policy (Learn from Japan &Korea, 1980s-)
 Botswana’s Productivity Movement (1990s-), with
Singapore’s assistance Rwanda’s ITC Drive (2000s-)

Factors for
Successful National Movement
National movement is not just a few projects; it is
a comprehensive drive with strong passion anddeep commitment, involving everyone from top tobottom and taking a decade or more to accomplish.
 Strong personal commitment of top leader

 Top-down guidance for grassroots participation
 Performance-based incentives and rewards

 Supporting institutions and mechanisms at central

and local levels
 Authorized and standardized training programs forconcerned officials, leaders and participants Long-term implementation with evolving emphasis(from state-led to market-driven)

Example: Singapore’s
Productivity Movement
 1979: PM Lee Kuan Yew states “Workers here are notas proud of or as skilled in their jobs compared toJapanese or Germans.”
 1981: LKY studies Japanese practices and asks Japan
Productivity Center for cooperation.
 1981-87: November is designated as Productivity
Month; LKY delivers his annual speech on productivity.
 Singapore’s positive features:
Strong personal commitment by Prime Minister Mass campaign for awareness raising Three-way cooperation among government, industry andlabor unions
 JICA assistance from 1983 to 1990
 Producing private consultants from JICA trainees by
installing proper system and incentives
Singapore:
Evolution of Productivity Organizations
PeriodOrganization

1964

Productivity Unit, within Economic
Development Board (EDB)

1967-72 National Productivity Center- Autonomously-run division under EDB

1972-95 National Productivity Board (NPB)- Statutory body, initially affiliated with
Ministry of Labor and later with Ministryof Trade and Industry (MTI)

19962001

Productivity Standard Board (PSB)- Statutory body, affiliated with MTI

2002Standards, Productivity andpresent Innovation Board (SPRING)- Statutory body, affiliated with MTI

Remarks
1965:Charter for
Industrial Progress,
Productivity
Code of Practice
1971:Tripartite
Interim Committee (toprepare NPB)
1973:Singapore
Productivity Assn.
(SPA) formed
1981:Productivity
Movement LaunchedSingapore: Productivity Movement, 1981-1990s

Awareness stage
1981-85

Create widespreadawareness of productivity
among companies andthe workforce

Action stage
1986-88

Translate “Awareness”
into specific programs
To improve productivity
At the workplace

Ownership stage
1989-90s

Encourage ownership of
Productivity Movement
by private firms

JICA-supported Productivity Development Project(PDP: 1983-90)
Training of NPB staff
Massive campaign

 NPB staff (with JICA experts)
conduct company visits,model company project, etc.

Private management
consultants

90s-

Start international
cooperation

Awareness Stage: 1981-85
 Focus

Positive work attitude
Teamwork
Recognition for companies and individuals

Mascot: The
Teamy Bee

 Measures taken






Education of the public—campaign slogans and posters:“Together We Work Better”
Information dissemination and training
Strengthening company loyalty
Labor-management joint consultation
Promotion of productivity in the public sector

Source: Information provided by Mr. Lo Hock Meng to the GRIPS mission on Sept. 2, 2010.

Action Stage: 1986-88
 Focus

Skills upgrading of management and workers
Upgrading of companies’ operational efficiency

 Measures taken







Model company project – implemented jointly by NPB
staff & JICA experts
Management consultancy referral schemes, associate
consultant scheme – mobilizing private consultants
trained under JICA-supported PDP
Industry-based consultancy assistance scheme
Training of workforce (via. Skills Development Fund)
Collaboration with other National Training Programs

Source: Information provided by Mr. Lo Hock Meng to the GRIPS mission on Sept. 2, 2010.

Ownership Stage: 1989-90s
 Focus

Self-sustaining Productivity Movement

 Measures takenPrivate sector leading the annual productivity campaign
Singapore Quality Award (1994- )Launch of Productivity Activists Scheme (1996- ) International cooperation
Singapore begins to assist other countries in productivity(ODA-based & fee-based programs: ASEAN, Botswana,Rwanda, Southern Africa…)

Source: Information provided by Mr. Lo Hock Meng to the GRIPS mission on Sept. 2, 2010.

3. Policy Measures
 In our age, policy space for latecomer countries issomewhat narrower than 1960s-1970s (importtariffs, export subsidies, etc. are not allowed).
But there are still many policies permitted under
WTO/FTAs/EPAs.
 East Asian neighbors are already implementing
such policies (“proactive industrial policy”). Study
them as raw materials for building Vietnam’s own
policy package.
 Broad industrial policy menus are basically thesame across countries. Success or failure depends
on details (how well each policy is implemented)
rather than following different policy menus.

Proactive Industrial Policy:
Seven Required Principles

1. Strong commitment to global integration andprivate sector driven growth
2. A wise and strong government guiding private
sector
3. Securing sufficient policy tools for latecomerindustrialization
4. Constant policy learning through concrete
projects and programs
5. Internalization of knowledge, skills andtechnology as a national goal
6. Effective public-private partnership7. Collection and sharing of sufficient industrial
information between government andbusinesses

Standard Policy Menu in East Asia
 Kaizen (factory productivity improvement tools)
 Shindan (SME management consultant system) Engineering universities (King Mongkut ITK, Nanyang

Polytechnic, Thai-Nichi Institute of Technology…)
 TVET-business linkage (Singapore, Thailand…)
 SME finance (two-step loans, credit guarantees…)
 Integrated export promotion (Korea)
 Industrial zone development (Taiwan, Korea, Thailand,
Malaysia, Singapore…)
 Strategic FDI marketing (Thai BOI, Malaysia’s MIDA,
Penang, Singapore) Supporting industry promotion (parts & components;
Thai auto)Standard Policy Menu for Enhancing
Industrial Human and Enterprise Capability
Main objectives(1) Legal and policy frameworks(2) Local capacity building(industrial human resource andlocal enterprises)

Sub items
Laws and regulations
Ministries/agencies for promoting SMEs, FDI, etc. with sufficient capability and authority
Inter-ministerial coordination mechanisms
Effective public private partnership (PPP)
Mechanism for business-government-academia linkage
Policy system consisting of visions, roadmaps, action plans, and monitoring
Standards for quality, safety, skills, environment, etc.
Mechanisms for protecting and utilizing Intellectual property rights
Strengthening of industrial statistics
Strategic mobilization of international cooperation
Universities of technology and engineering, industrial colleges
Short-term courses for enterpreneurs
Technical support on specialized skills for engineers
Technical and vocational training for new or current workers
Skill certification, competition, and awards
Subsidies and incentives for targeted activities (worker training, technology transfer, die andmold, marketing, ITC, etc)
Management or technical advisory service (by visiting consultants, short-term)Enterprise evaluation and advice system (institutionalized shindan system or technicalextension services) - also related to SME finance
Local enterprise networks

(Cont.)(3) Finance

Development financial institutions
Subsidized commercial bank loans for targeted firms (two-step loans)
Credit guarantee system
Equipment leasing
Venture capitalEnterprise credit information system
Enterprise evaluation and advice system (same as in (2))(4) FDI marketing
List of priority products and activities and a system of investment incentives
Investment promotion seminars and missions
Effective investor information package and website
Investment promotion offices abroad
One-stop services and enteprise support (before and after investment)
Upgrading infrastructure service quality (power, transport, water, etc)
Environmental control and facilities (incl. waste water treatment)
Industrial estates with sufficient infrastructure services and administrative services (incl.
specialized industrial parks)
Labor support (training, recruiting & matching, housing/domitories, commuting, health care,etc.)
Prioritized and targeted FDI marketing
Inviting individual target company ("anchor firm") and provision of required conditions(5) Linkage (learning by working Trade fairs and reverse trade fairs
with global standard firms; market Enterprise databases (SMEs, supporting industries, sectoral)
development)
Official intermediation/promotion of subcontracting
Incentives/subsidies for FDI-local firm linkage
Domestic and export market development support
Establishment and enhancement of industry associations

4. Policy Making Procedure
Necessary steps:
1. Clear vision given by top leader
2. Consensus building (setting broad goals & directions)- Brainstorming among related ministries and agencies- Collection and analysis of international best practices- Discussion with non-government stakeholders

3. Documentation- Drafters can be officials, academics, or consultants- Participation of all stakeholders in drafting & commenting

Vietnam is weak in all these steps.

Standard Policy Making Procedure
Top leader
1. Vision

2. Consensus
building process

3. Documentation
process

Brainstorming

Studies& surveys

Set broadgoals &
direction

Drafting
work

Finalize& approve(May beoutsourced)

Stakeholder
consultation
Participation
Ministries＆agencies

Comments& revisions

Regions &localities

Participation
Businesses& bus. assoc.

Academics &consultants

Note: the entire process is managed and coordinated by a lead ministry or agency.

Thailand:
Automotive
Industry Master
Plan 2007-2011
Brainstorming;
agreeing on goals& directions“CEO Forum”
FDI & local firms
Exporters
MoI, MoST, MoEdu
Professors’ team
(Chulalornkorn Univ)• The whole process (about 1 year) is managed
by Thailand Automotive Institute (TAI).
• Goals are set by private firms; no government
approval is needed for final M/P.

Set up formal
committee fordrafting M/P
M/P Steering
Committee
Organized by MOI

Subcommittees
study identified
issuesHuman resource

Productivity

M/P
Drafting
By TAI staff

Businesses
Officials
Experts

MarketingEngineering

Business
Gov’t

Experts(Informal)

Business
Gov’t

Experts(Formal)Investment& linkage

Comment &dissemination

Implementation

Malaysia: 3rdIndustrial Master
Plan 2006-2020

Industrial Planning
Committee (IPC)
Steering Committee (SC)Grand total 338+advisors

1st draft
brainstorming

SC

Review and inputs byprivate sector & MITI
TRGs are called
and start work

(25)

Services

Mar.2005

Business Business

SectoralDevelopment

IPC

SC

Logistics

Sep.2004

Headed by MITI Official; members from MITI,
EPU, econ. agencies, businesses (23)Marketing/branding

Enabling
technologies & ICT

Human resource
development

SME
development

Investments

External tradeMacroframework

Advisor/
Coordinator

MITI MATRADE MIDA SMIDEC MEF/
MDC
business
(38)
(19)
(23)
(19)
(34)
(25)

Headed by MITI Minister; members from
MITI, EPU, economic agencies (27)Technical
Resource
GroupsMITI

MIDA :Head of TRG(39)(26) (=>Total 288)(40)

Aug.2006

SC

IPC

MITI
More fine-tuningwith TRGs

Further work by TRGs

Source: MITI website, and VDF mission to Kuala Lumpur, Jan.2006.
Note: Numbers in parentheses indicate the number of members in each committee or group.

MITI

FinishFinal adjustments
in data & words
within MITI

Vietnam: Traditional M/P Drafting Process
Prime
Minister
Review for
approval

Order

SubmitInterministerial
review

Drafting
Team

Minister

MPI & other
Ministries

Submit

Data

Internal
review

MPI & other
Ministries

GovernmentAppeal letter toPrime Minister whenproblems arise

Contact
Ministry whennecessary

Hearings,
symposiums(sometimes)

Technical
assistance(sometimes)

International
experts

Business Community
No permanent channel for continuous policy dialogue(case-by-case, temporary, ad hoc)Common Mistakes
Practices that do not lead to policy learning:
1.
2.
3.

4.

Lack of clear vision or directive from top leader
Policy making within a narrow circle of officials
without deep involvement of other stakeholders
Outsourcing of entire policy drafting to outsideacademics or consultants, with policy makers
only making comments & revisions
Bottom-up collection of ideas drafted by various
ministries which ends up in unconnected
chapters and too many priorities

Vietnam – items 1, 2, 4 must be improved.

5. Policy Organization
What organizational arrangement can ensure good
policy procedure as proposed above? There arealternative models: Technocrat group directly under PM or President National Councils or Committees
 Super-ministry Sector/issue-specific institute acting as a hub Strong leader without institutionalization
These approaches are not mutually exclusive. For
Vietnam, I recommend the second approach.

Technocrat Group Approach- Elite technocrat groupwith full planning authority
given by top leader- Members are selected
officials, business leaders& experts with goodeducation & experience

Prime Minister
Direction, fullauthority forpolicy making

Technocrat Group(Policy Maker)
Policy,guidance andmonitoring

Korea – Econ. Planning Board
Malaysia – Econ. Planning Unit
Thailand – NESDB
Taiwan – Kuomintang Elites
Indonesia – “Berkeley Mafia”
Chile – “Chicago Boys”

Faithful
execution andreportingBusinesses
Academics
Experts

Faithful
executionand reporting

Ministries (Policy Implementers)National Council/Committee
Approach
Typicalconfiguration:

Businesses
Academics
Experts

PM orPresident
Chair, give mandate

National Councilor Committee

Plan

Supportworking groups or task forces
for specific issues and sectors

Ministries and agencies

Implement

Comparing the Two Approaches
Technocrat groupserving top leader

National councils/
committees

NumberOnly one

Up to several

Tasks

Multiple and variable

Single task

Time
scope

Semi-permanent(until this system is nolonger needed)

Temporary(until the assigned task iscompleted)

Relationwithministries

A planning body above all Ministers and officials
ministries; the latter are
participate in policy making
implementing bodies
as members

CommentonVietnamPreviously, PM’s ResearchCommission played anadvisory role without
policy making authority.

There are too many
committees. Selectivity andstrategic action-orientation
are needed.

Korea 1960s-70s: Economic Planning Board

President(Blue House)Economic
SecretariatsState Council

Five-year plan

KDI

Chaired by Deputy PMEconomic Minister’sCouncil

EPB
Deputy PM- Development planning- Public investment planning- Budget- Monitoring- Aid management

Govt.-BusinessMeetings:- Export promotion- Economic briefs- HCI drive, etc.





MTI
Ministries/Agencies

Business FinanceDirect presidential
control overeconomic policies
EPB as superministry
Research institute(KDI, etc.),
providing analysis
for MLT economic
policies
Govt.-business:very close &cooperative
relations
Performancebased rewards &penalties

Korea Now: Presidential Committees
Vision & Priority
AgendaPresident

Chairman
Co-chaired byPrime Minister

Chairman

Chairman

ChairmanPC.
Green Growth

PC.
Future & Vision

PC. National
CompetitivenessPC. Nation
Branding(Feb. 2009)(May 2008)(Feb. 2008)(Jan. 2009)

Secretariat

Secretariat

Secretariat

Secretariat

about 60 staff(seconded officials
from various govt.
agencies

about 30 staff(seconded officials
from various govt.
agencies)

PolicyStaffing

Ministry A

Drafting, Inter-ministerial coordination, etc.

Ministry B

Ministry C

Ministry D

Implementation

Ministry E

Ministry FSingapore Now: New Productivity Drive
Economic
Strategies
Committee: Report

Chaired by Deputy PM
Members from ministries/agencies,
business, unions
Joint secretariat: MTI, MOM(ministers)

National Productivity andContinuing Education Council (NPCEC)
Review & submit

Oversight
Review & approval

Led by MTI, MOM (PS level)
Inter-agency coordination

Working Committee for Productivity andContinuing Education (WCPCE)
Sectoral “Productivity Roadmap”
for the next 10 years
Draft & propose

Financial Incentives
Scrutiny

National
Productivity
Fund

Productivity Skills Dvt. Fund
& Innovation Lifelong Learning
CreditE.F.

Sector working groups (12 priority sectors)
Construction
BCA
UnionsIndustry

Electronics
EDB
UnionsIndustry

Cross-cutting issues
Low wage workers
Research & benchmarking
Infocomm and logistics

Precision Eng. Transport Eng. General Mfg.
EDB
EDB
SPRING
UnionsUnionsUnionsIndustry
Industry
Industry

F&B
SPRING
UnionsIndustry

Retails
SPRING
UnionsIndustryThailand 1980s:
Eastern Seaboard Development(Large-scale industrial region development)
Cabinet
ProposeEastern Seaboard Development Committee (ESDC)

Chair: Prime Minister (later, Deputy PM)
Secretary: Secretary General of the National Economic and Social
Development Board (NESDB)
ProposeSecretariat

Appoint

Sub-committees

Chair: Minister of government agency in charge

・Approve・Control・Direct
・Supervise

BudgetTechnical AssistanceBureau of the
Budget (BOB)

Department of Technicaland Economic
Cooperation (DTEC)

Loan

Office of Eastern Seaboard
Development Committee(OESD) within the NESDBFiscal Policy
Office (FPO)

Gov’t agencies (central, regional, local) and State enterprises

・Coordinate
・Oversee・AdviseMalaysia 1991-:
Industrial Policy
Coordination

NPC

PM’s Dept.

PM

NEAC

Deputy PM

EPU(planning)

ICU(monitoring)

Vision 2020
Malaysia Plan (Five-Year DP)
MOF

Budgetdialogue

Political Parties

Malaysociety

Chinesesociety

MITI

Indiansociety

AnnualdialogueCentralBank
IMP2Chaired by MITI Minister,
Govt & business.

Industry Coordination
Council (ICC)
Govt. only (8 ministries/agencies)

Industry Policy and Incentive
Committee (IPIC)
Govt.& businessIndustry Cluster Working
Groups (18 CWGs)

IndustrygroupsChambers of Commerce

Individual
firms

Source: Adapted from Takashi Torii, “Mahathir’s Developmentalism and Implementation Mechanism:
Malaysia Incorporated Policy and BCIC,” ch.4, Higashi (2000), pp. 166, Figure 2.

Malaysia Now: National SME Dev. Council
National SME Development Council

14 Other
Ministries
MITI’s key departments
Strategic Planning

Est. 2004,
chaired by PM

Ministry of Int’l Trade and Industry(MITI, lead ministry for SMEs)
Implementing agencies under MITI
-SME Corp. Malaysia (lead agency for SMEs
and secretariat to National SME Dev. Council)

Entrepreneurship
Development
Sectoral Policy &Industrial Service
Investment Policy &Trade Facilitation
Services Sector
Development-Malaysian Ind. Dev. Authority (investment)-Malaysia Productivity Corp (research,training, consultation)-SME Bank (finance)-Malaysian Ind. Dev. Finance (finance)-MATRADE (trade)
Private sector partners
Service & training providers (private
consultants & companies)Super Ministry Approach One ministry with broad authority for industry(sectors, trade, technology, training, standards,
SMEs, FDI, IPR, regional development…)
 Performing multiple tasks—planning, interface
with politicians, working with businesses andother stakeholders, trade negotiation, draftinglaws and regulations, monitoring, dissemination….
 Highly motivated and capable officials, andextensive information networks are needed.
 No charismatic leader is needed for this approach
to work.

Organizational Structure of Japan’s Ministry ofInternational Trade and Industry, 1960s
M ITI
M in ister
Politica lly a pp ointed V M
A dm in istrative V M
D eputy V M s
S pecia l assistants

M ain Bureau
M in ister’ s S ecretariat(in cl. Research & S tatistics)
Int’ l Trade Policy Bureau
Int’ l Trade A d m in. Bureau
Industria l Policy Bureau
Industria l Location &Environm ent Protection Bureau
Basic In dustries Bureau
M achinery & Inform ation In dustrie s
BureauC onsum er G oods Industrie s Burea u

D eliberation C ouncils
Ind ustrial S tru cture
Export Insurance
TextilePetroleum
Electrica l W orks.........

Attached O rganizations
and External Bureaus
A gency of Nationa l Re sources& Energ y
Patent O ffice
S M E Enterprise A gency
A gency of Industria l S cience& Techn ology
Trade & In vestm ent Tra in ing
O ther(*) In dustrial Structu re Coun cil:influential in the 60s (18 special
com m ittees): industrial pollution,
int’ l econom y, consum er econom y,heavy industry, chem ical industry, etc.

Int’ l Trade Transaction
Industria l Location & W ater
Product S afety & H ouseh old G oods Q uality In d ication
A ircra ft & M ach inery Industry
Traditiona l C rafts Indu stry...................

Hub Institution Approach A semi-official sector/issue organization set up by

government plays policy coordinating role.
 As a neutral NPO, the hub institution organizes
and manages policy drafting.
 This approach requires (i) deep trust among all
stakeholders; (ii) capable leader & staff at hub
institution; and (iii) flexible and pragmatic policy
making culture (MOI lets hub institution to
produce policy).

Thailand: Specialized Institutions
Name

Start-up Date

Organizations

Thailand Productivity InstituteJune 1995

Originated from MOI industry prom otion dept.
20 Board m em bers, 161 staff.

Thai-German InstituteNov. 1995

Financial cooperation from KfW, GDC. Technicaltraining (CNC, CAM/CAD, etc.), 12 Boardm em bers, 79 staff, 5 Germ an experts.

Thailand Textile InstituteJune 1997

Based on MOI industry prom otion dept. andindustry association. 20 Board m em bers, 27
staff.

National Food Institute (NFI)

Oct. 1996

Based on MOI industry prom otion dept. andindustry association. 20 Board m em bers, 27
staff.

Management Systems
Certification Institute (MSCI)March 1999

Originated from Thai Industrial Standard
Institute (TISI). 14 Board m em bers, 55 staff.

Thailand Automotive Institute(TAI)

April 1999

Supporting industry developm ent. 20 Boardm em bers, 28 staff

Electrical & Electronics Institute(EEI)

Feb. 1999

Supporting industry developm ent. 29 Boardm em bers, 28 staff.

Foundation for Cane & Sugar
Research Institute

April 1999

Originated from Cane & Sugar ResearchInstitute. 13 Board m em bers.

Institute for SME Development

June 1999

Modeled on Japan’ s SME Univ. Operated byTham m asat Univ. in cooperation with 8 local
universities. 21 Board m em bers.

The Iron & Steel Institute ofThailandDec. 1998

Aim ed at joint m arketing prom otion of four
steel com panies (oversupply)(cabinet approval)

Note: These institutions are required to be self-financing without official financial support.

Thailand: Institutional Hub for linking businesses,
government and experts(Under Thaksin Government, 2001-2006)
Visions to be
concretized

Prime Minister

DirectaccessPrivateSectorThailand should become:-“Detroit of Asia”-“Hub of Tropical Fashion”-“Kitchen of the World”

Order

Relevant
Ministry

Industry-specificCommittees
High level

Specialized
Institute
Operational level

Experts

Recommended Actions for Vietnam
1. Identify a small number (up to several) of key
industrial strategies toward 2020.
２．Study international best practices in chosen
strategies as building blocks of a policy
package suitable for Vietnam.
3. Create appropriate policy procedure and policy
organization to implement chosen policies.
４．Progress review by highest level.

Need for Policy Focus Points
 Too many priorities is equivalent to no priority. Only

up to several strategies should be chosen for vigorous
action.
 Each strategy must have lead ministry/agency,
master plan, budgeting, staffing, monitoring, andinternational cooperation.
 Strategies may have large overlaps. Coordinationmust be done at above-ministry level (PM or DPM).
Engineering
universities

TVET

Supporting
industries

Industrial
clusters

SMEs

Michael Porter’s Proposal for Vietnam

Source: M. Porter’s Presentation at Vietnam Competitiveness Report launching seminar,
Hanoi, Nov. 2010.

Vietnam: My Proposal for NCC
Prime Minister
Direct, give mandate

Plan

National Competitiveness Council

Commission
studies, reports

Chaired by PM (or DPM)
Secretariat: Government OfficeMembers: Heads of concerned
ministries

Support, report, draft

Working groups for specific issues or sectors

SMEs

Supporting
industries

Clusters

TVET

Higher Educ

Secretariat:
MPI

Secretariat:
MOIT

Secretariat:
MOIT

Secretariat:
MOLISA

Secretariat:
MOET

Ministries,
businesses,
experts

Ministries,
businesses,
experts

Ministries,
businesses,
experts

Ministries,
businesses,
experts

Ministries,
businesses,
experts

Ministries and agencies

Implement

Note: This is a preliminary idea of K. Ohno to initiate discussion; listed issues and ministries
are suggestions only; everything is subject to addition, deletion or change.

A Proposal for NCC (cont.)
 Full-day NCC meeting, chaired by PM (or DPM),

should be organized every three months or so.
 PM should give concrete instructions and ask forreports, studies, and solution of problems. He
should coordinate among issues and ministries.
 NCC members are ministers, prominent experts,
and business representatives.
 NCC secretariat to be created within Government
Office to offer administrative support.
 Issue-based working groups should be formed
and lead ministry should be assigned. They must
work constantly with stakeholders and reportresults at every NCC meeting.

References
Ketels, Christian, Nguyen Dinh Cung, Nguyen Thi Tue Anh, and Do Hong Hanh(2010), Vietnam Competitiveness Report 2010, Central Institute for
Economic Management and Lee Kuan Yew School of Public Policy.
National Economic Advisory Council (2010), New Economic Model for Malaysia,
December.
Ohno, Izumi, and Masumi Shimamura (2007), Managing the Development
Process and Aid: East Asian Experience in Building Central Economic
Agencies, GRIPS Development Forum, March.
Ohno, Kenichi (2009), “Avoiding the middle-income trap: renovating industrial
policy formulation in Vietnam,” ASEAN Economic Bulletin, 26(1), 25-43.
Ohno, Kenichi (2011), “Policy Procedure and Organization for Executing HighPriority Industrial Strategies,” a paper prepared for the NEU-National
Assembly Conference on the Quality of Growth, Hanoi, Feb. 24.
Ohno, Kenichi (forthcoming), Learning to Industrialize: Catch-up Strategies
for Twenty-first Century Latecomers, Routledge.
World Bank (2010), “Avoiding the Middle-income Trap: Priorities for Vietnam’s
Long-term Growth,” a paper presented at Senior Policy Seminar, Hanoi,
August.