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Logistics to contribute up to 10 percent of Vietnam’s GDP by 2025

Logistics to contribute up to 10 percent of Vietnam’s GDP by 2025
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Vietnamese Prime Minister Nguyen Xuan Phuc has approved an action plan to increase competitiveness and development of Vietnam’s logistics, targeting the sector to contribute 8-10 percent to the country’s gross domestic product (GDP) by 2025.

The sector is set to enjoy annual growth of 15-20 percent while logistics costs are set to be lowered to 16-20 percent of the country’s GDP by 2025, reported local VNEconomy online newspaper on Thursday.

Currently, the costs of logistics currently are about 20 to 25 percent of the GDP, compared with the average rates of 7-10 percent in developed countries, said Vietnam’s Ministry of Industry and Trade (MoIT).

At the same time, the sector has now contributed some 2-3 percent to the country’s GDP, said the MoIT.

Tran Thanh Hai, deputy director of the ministry’s Import-Export Department said on Vietnam News online newspaper on Thursday that the country’s logistics development has been modest, as the number of firms operating in the sector is small at 1,300-1,500.

More than 70 percent of the businesses are small-and-medium sized firms with average capital of about 7 billion Vietnamese dong (320,000 U.S. dollars).

“The country’s logistics effectiveness has been low, while available resources have not been fully exploited,” Hai said, adding that the action plan will provide short and mid-term solutions to improve the logistics sector in the next 7-8 years.

To achieve the goals, the plan suggested improving policies, attracting more investment into logistics infrastructure and fostering cooperation between local logistics firms and international partners.

It also hopes to enhance logistic infrastructure connectivity to link Vietnamese ports with neighboring countries.

According to the plan, investment is called for the construction of level-one logistic hubs in capital Hanoi and southern economic hub of Ho Chi Minh City as well as level-two logistic centers in localities such as northern Lang Son, Lao Cai, Hai Phong, central Da Nang, Quy Nhon and southern Can Tho provinces.

SOURCE: Xinhua

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