Organizer: Ngoc (Angie) Tran, University of Southern California
Chair: Hy V. Luong, University of Toronto
Discussant: David W. P. Elliott, Pomona College
Vietnamese political economy has been undergoing transformation since the economic reform process started in the late 1980s, shifting from a very high level of state intervention (a command economy) to a lower level (a more market-oriented system). Within the context of global restructuring and economic liberalization in the Asian Pacific region, Vietnam has been facing opportunities as well as challenges to integrate with other regional economies and to position itself in the world economy. Using a comparative and interdisciplinary framework, the three panelists analyze the Vietnamese Textile and Garment Industries (VTGI) in relation to other Asian textile and garment industries, and examine how both Vietnamese state and non-state sectors respond to an important presence of foreign capital.
David Smith provides a global perspective, detailing the effects of global restructuring on the garment industry in three Asian countries (South Korea, Indonesia, Vietnam). He illuminates the complexities and nuances of the shifting of garment production away from already-industrialized countries to "offshore" production sites in the developing countries in Southeast Asia. Ngoc (Angie) Tran integrates the developmental state and global commodity chains frameworks to analyze the interactions between the Vietnamese government, domestic firms and foreign capital. From the five-month field research in Vietnam, she presents findings assessing the developmental role of the Vietnamese state within the context of the global garment industry. From the context of the Vietnamese political economy, Hy V. Luong examines the competitiveness of state and non-state industrial enterprises, and provides an in-depth analysis of the interactions among domestic actors, especially the development of the private sector in the VTGI. He also presents findings from interviews with many firm managers and workers throughout Vietnam.
For the first time, an AAS panel focuses explicitly on the political economy of a major industry in Vietnam with concrete findings from primary research in a comparative and interdisciplinary framework. Moreover, it touches on larger issues about global restructuring, state in transition and developmental state relevant to many other countries.
The Contemporary Restructuring of East Asian Apparel Production: Implications for
the Vietnamese Garment Industry
David A. Smith, University of California, Irvine
The textile and garment industries are extremely interesting cases of global economic restructuring. This paper illustrates the factors promoting the shift of apparel production (and other light industries) away from core and semiperipheral regions in the world economy, illuminates some of the complexities and nuances of that process, and discusses the implications of this for the emergence and consolidation of export-oriented apparel manufacturing in Vietnam and other Southeast Asian countries. My story begins in South Korea, where apparel manufacturing, which grew rapidly during the 1970s and 1980s, faces an uncertain future in the 1990s, due to escalating wages and severe labor shortages. This forces Korean garment makers to seek "offshore" production sites. Southeast Asia, along with Central America and the Caribbean, became attractive targets for Korean apparel investment. In the 1980s, Indonesia, with its cheap and abundant labor and a state eager to welcome foreign investment, was a powerful magnet for garment capital from Korean and the other Asian NICs. Despite some recent wage pressure and labor unrest, this country (along with China) seems well-positioned to continue as a major global "sourcing" area. More recently, Vietnam, with a nominally Communist regime pushing a policy of "market liberalization," and gradually improving relations with its old enemy the United States, appears poised to become a big player in world apparel production. Garment manufacturers from South Korea and elsewhere have begun to set up factories in Vietnam to take advantage of the country's large, industrious, and extremely cheap labor force. Dealing with a rapidly changing global apparel production and marketing system presents special challenges to the Vietnamese state, local capital, and workers.
Can the Vietnamese State Play a Developmental Role? Integrating the Vietnamese
Textile and Garment Industries into the Global Economy
Ngoc (Angie) Tran, University of Southern California
This paper presents findings from five months of field research in Vietnam. It examines the extent to which the Vietnamese government has tried to be a developmental state in facilitating the development of Vietnamese Textile and Garment Industries (VTGI), especially in terms of upgrading garment export and vertical integration. The context is the globalization of the textile and garment industry in general, and a rapid economic transition in Vietnam (characterized by a shift from a relatively-closed command economy to a more open market-oriented economy) in particular.
This paper integrates the developmental state and the global commodity chains (GCCs) frameworks in analyzing the relationships between the Vietnamese government and both domestic and foreign actors in the VTGI. It goes beyond the "state versus market" debates by showing that state and firms are intertwined, demonstrating how the Vietnamese government is involved in the VTGI at both production and policy levels. Moreover, it analyzes how the VTGI is linked to the global economy through the triangle manufacturing (Vietnamese producers, foreign buyers, foreign middlemen), and how government policies address challenges and opportunities arising from this arrangement.
Within the integrated framework, this paper presents findings from interviews with government officials and over 60 firm managers, analyzing specific interactions between Vietnamese actors (from both state and non-state sectors) and foreign actors. Moreover, it assesses the developmental role of the state through an examination of the effectiveness of specific state policies intended to promote the production and export of textile and garment products in the context of the global garment industry.
The Competitiveness of State and Non-State Enterprises and the Transformation of
the Textile and Garment Industries in Vietnam
Hy V. Luong, University of Toronto
This paper examines the competitiveness of state and non-state industrial enterprises in the Vietnamese garment and textile industries, as Vietnam undergoes economic restructuring and becomes more integrated with regional economies in East and Southeast Asia. While the more capital-intensive textile industry has encountered major difficulties and has not been vertically well integrated with the labour-intensive garment industry, the latter has grown considerably in the 1990s. Vietnamese garment firms have primarily provided labour, while foreign firms provide designs, virtually all materials, and quality control for foreign markets.
Within the domestic context of the Vietnamese political economy, despite the oft-quoted inefficiency of the state sector, state enterprises in these two industries have held their own grounds vis-à-vis the non-state sector. Among their advantages are the easier access to capital and land for production purposes. Within the latter, private firms have grown at the expense of cooperatives. Even in the more capital-intensive textile industry, some private firms have prospered in their own niches through a flexible production strategy, including subcontracting to selected household producers for semi-finished products, and providing high-quality raw materials and giving the products finishing touches before distribution to domestic and international markets. In the more labour-intensive garment industry, private firms also build their growth strategy on greater production flexibility and competitive pricing. They have grown faster in southern Vietnam where industrial entrepreneurs have a long tradition of sensitivity to the world market.
The paper is based on survey and interview data from 50 northern and southern Vietnamese firms of different sizes, and from approximately 1,200 workers in these firms. The paper also examines the theoretical implications of the Vietnamese data on the competitiveness of these enterprises in relation to the neoclassical economic tradition, dependency theory, the statist perspective, and the institutionalist approach.