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Hanoi, Vietnam

Prof. K. Ohno's Homepage

Updated July 13, 2018

GRIPS Office: E410     Profile     GDF    VEPR


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Vietnam Then & Now (June 2018)

I have been going to Vietnam since 1995, over 200 times, for policy research. I helped Vietnamese kids to go to school and now live with some of them when in Hanoi. Here are photos of Hanoi to show how the city changed in the last 23 years. But the mindset of Vietnamese people and officials are slower to change, for better or worse.


1995 - bicycles dominate Hanoi streets
1996 - Izumi, me & street sellers at Hoan Kiem Lake - two of them are now my daughters
1996 - motorcycles increase but without helmets
2005 - a city very densely built but few high rises
Now - high-rise dwellings are emerging everywhere; an urban rail is being built above
Too many apartments in Western Hanoi
Times City - a huge underground shopping center
AEON Malls are increasing across Vietnam

On weekends Hanoi center is closed to traffic

Lectures

Policy Design and Implementation in Developing Countries
Spring, Friday 10:40-12:10 Lecture room I (eye)

         July 13: student presentations
        
   Prossy  Uganda industrial policy           
            Tomas  Roads in St Vincent & G

July 20: student presentations
  Mamum  kaizen in public service
  Roy  Bangladesh industrial policy
  Kumar

Submit your slides asap; produce light slides by shrinking the memory size of photos and graphs

         Syllabus      Grading rule
        
Instructions for student presentation
         Information on last year


Economic Development of Japan
Spring, Thursday
16:40-18:10 Lecture Room H

This course covers Japan's industrial development from Edo period (17-19c) to present with particular attention on (i) why Japan industrialized so early and so fast; (ii) interaction between external & domestic forces; (iii) interaction between private actors & government; and (iv) social & political aspects of development.

July 19: bubble and Abenomics

Syllabus (schedule, slides, grading)
Textbook - you may place order by yourself or purchase from instructor at about 25% discount (4,000 yen).

Pre-WW2 Japan had several camera makers co-existing and attaining high technology with global competitiveness. Technology gaps were overcome by hiring German engineers, internal R&D and other methods. more

Answers to some of the students' questions in the past:

- Foreign teachers at Kobu Daigakko
- Sakoku (closing/re-opening country)

- How hans promoted industries
- More about terakoya
- Kaiyomaru
- High-level Industrial Schools in Meiji
- Factory relocation around 1923
- What was Security Maintenance Law?
- How Toyota started car production
- How BOJ reacted to 2011 Tohoku Earthquake
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Industrial studies & reports

Technology transfer of Meiji Japan (Uchida)
Introducing Kaizen in Africa
Ethiopia Information Kit for Japanese businesses

Mission reports on industrial policy quality
     Singapore (Sep.2010)
     Korea (Dec.2010)
     Taiwan (Apr.2011)
     India (Oct.2012)
     Mauritius (Oct.2012)
     Indonesia (Jul. 2014)
     Rwanda (Aug. 2014)
     Thailand (May 2015)
     Cambodia (May 2015)
     South Africa (Apr. 2016)

Paper on industrial policy quality

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Streets are still chaotic & few observe traffic rules; most now wear helmets, but not everyone

 Research Topics   2005  2006  2007  2008  2009  2010  2011  2012  2013

How Nations Learn: a book project (June 2018)

Kenichi Ohno and Arkebe Oqubay, an Ethiopian high official, plan to edit a book on How Nations Learn, inviting renowned development scholars to review history of industrial catch-up, state's role in innovation, East Asian country cases, prospects in Latin America and Africa, and technology learning in the 21st century. The book will focus on not only what latecomers learned but how. Dr. Arkebe is a policy dialogue partner for GRIPS/JICA as well as the driver of FDI attraction and technology learning in the Ethiopian government. The preliminary draft on Meiji Japan's technology learning by Ohno is already prepared.

How Ethiopia learned from Japan - so far (May 2018)

The Oxford University Press has an Ethiopia Handbook project to which Izumi & Kenichi Ohno contribute as joint authors. We have written a chapter on how Ethiopia has learned from East Asia, especially Japan, and how GRIPS and JICA have conducted bilateral industrial policy dialogue since 2008. The Handbook is scheduled for publication in 2019. The GRIPS Development Forum has discussed many policy issues with PM Meles (2008-12) and PM Hailemariam (2013-17). With the inauguration of new PM Dr. Abiy Ahmed this April, we are about to re-establish our strong bilateral industrial cooperation and commitment in Ethiopia, and Ethiopia is also willing to work with Japan.  Our manuscript

Productivity in Ethiopia and Vietnam (Mar. 2018)

Ethiopia and Vietnam are two countries with which GRIPS Development Forum (GDF) conduct intensive policy research & dialogue. Despite their different level and pattern of development, both now focus on productivity and GDF is deeply involved in it.

In both, GDF works very closely with the Japanese embassy, JICA and policy research institutions. We work with high levels (PM, PM Office, ministers) as well as relevant ministries and implementing agencies. In Ethiopia, JICA-supported Kaizen programs are now nationally owned and strongly expanding. In Vietnam, productivity concern is widely talked about but real action is slower than in Ethiopia.

Kidanemariam, Ohno & Thanh in Addis Ababa

We mobilize researchers who received PhD from GRIPS under K. Ohno's supervision--Dr. Nguyen Duc Thanh (director, Vietnam Economic Policy Research, Vietnam National University; former PM advisory member) and Dr. Kidanemariam Berhe Hailu (Lead Researcher, Policy Study and Research Center under federal government). GDF is currently working with them to produce a policy-oriented Productivity Report in each country.

Productivity--a targeted topic for policy awareness and action (Jun. 2017)

There are many things to be done to accelerate industrialization, but a country has only limited time and human and financial resources. Instead of advising 50 policies, it is better to concentrate on a few topics (or even one), making sure that the chosen policy is designed and executed with full support and professionalism.

Our GRIPS team, together with JICA and developing country researchers, is promoting "productivity" as a national core issue in both Vietnam and Ethiopia. Actually, Ethiopia is already vigorously implementing kaizen as a productivity tool, but we want to broaden the policy scope beyond kaizen. As to Vietnam, it talks about productivity but does not know what to do.

Trying to take productivity issues to Vietnamese government@

GRIPS/JICA commissioned a policy paper on productivity to Vietnamese researchers, soon to be completed. In Ethiopia, we also commissioned a small review paper and are talking to the Central Statistical Agency to assess its data quality and analytical capacity. Apart from data works, GRIPS/JICA are implementing or planning projects to improve productivity in both countries. They include generating export champion products, handholding for selected manufacturing firms, review of past productivity tools and city kaizen movements, strengthening FDI policy and industrial park quality, dispatching Japanese industrial experts, and strengthening policy capacity of domestic researchers and industrial institutes.

Japan is a lead donor in QPC (quality, productivity & competitiveness) in Ethiopia. We are working with Japanese ambassadors in both countries to implement these policies.

Mobilizing foreigners proficient in monozukuri (Apr. 2017)

Mr. Dayasiri Mr.Tuyen

There are many non-Japanese people who studied in Japan or worked in Japanese firms, and mastered Japanese language and the spirit and skills of monozukuri (Japanese style manufacturing). The GRIPS Development Forum is proposing the Japanese government to actively support and use their businesses and services abroad. Izumi Ohno leads a policy research program at the Asia Pacific Institute of Research (Osaka) while Kenichi Ohno cooperates with Vietnamese firms, researchers and the Japanese embassy in Hanoi for that purpose.

When he was young, Mr. Dayasiri Warnakulasooria (Sri Lanka) came to Seto City in Japan to learn ceramic production. After returning to Colombo, he set up a ceramic factory and exported products to the US with Japanese guidance. He has long been a hub of learning Japanese language, spirit and technology in Sri Lanka, heading and actively assisting many programs and associations. He was awarded a Japanese medal for this.

Mr. Nguyen Xuan Tuyen (Vietnam) came to Japan as a ginno jisshusei (technical trainee) and learned welding at an SME at the foot of Mt. Fuji for three years. Upon returning to Hanoi, he created a company that trains and dispatches Vietnamese workers to Japan with proper mindset and attitude based on his own experience in Japan. He believes workers must have long-term life plans and self-discipline, and work very hard for their family and country. JICA now supports his company.

Both speak perfect Japanese and can teach Japanese spirit and attitude to others. They are willing to do more and more to spread Japanese monozukuri in their native lands.

Policy dialogue continues in Ethiopia (Jul. 2016)

The GRIPS Development Forum (GDF), together with JICA, has conducted Industrial Policy Dialogue with Ethiopia since 2008 (Phase 1 & 2). Regular and intensive discussions were held at three levels (Prime Minister, ministers, operational). Kaizen, the champion product approach, export & FDI policies, etc. have been implemented. Ethiopia is now learning advanced kaizen and disseminating kaizen knowledge to the rest of Africa. The Ethiopian government requested, and GDF & JICA agreed, to continue the dialogue into the third phase. Planning sessions for Phase 3 were held in Addis Ababa in early July.

Japan is going to provide a number of new industrial projects for strengthening Ethiopian enterprises, industrial linkage, technology transfer and investment climate. GDF will deeply involve Ethiopian policy research institutes to jointly produce pragmatic policy advice so they will be able to do the same even after Japanese experts leave - "import substitution" of industrial policy research. Two of the GRIPS PhD alumni will be involved in this.

Ethiopia is rapidly building industrial parks to absorb garment FDI from China, India, Southeast Asia, etc. now coming in large numbers. Japan will build a special industrial area that satisfies high standards required by Japanese FDI. The JETRO office was officially inaugurated in Addis Ababa on July 20.

South African automotive sector (Apr. 2016)

South Africa has good roads but car sales are slowing down.

The automotive industry in South Africa has grown on lavish subsidies on FDI car makers. However, it has stopped growing (current volume: 600,000 vehicles/year) and needs revamping in order to survive and compete globally. I was invited by the Japanese Embassy & JICA in Pretoria to look at the matter and advise what Japan could do to improve the situation.

I gave two seminars to policy makers and researchers, interviewed the National Treasury and the Department of Trade & Industry, had informal but intensive talks with key DTI officials, visited Toyota factory, and so on. The automotive policy of South Africa is very different from a typical East Asian country. It subsidizes CKD, SKD and parts import instead of domestic value creation or technology transfer. Incentives are fragmented and last only five years in principle. DTI officials want to improve the policy but top leaders are afraid to remove current incentives due to peculiar political economy of this country.

My diagnosis is that difficulty can be overcome only by strong policy ownership and capability. It is not certain if South Africa can do this. However, political leadership may improve in the near future. On the Japanese side, strong intellectual and industrial cooperation is useful provided that it is an "All Japan" effort encompassing all related ministries, JICA, JETRO and interested car makers.       My back-to-office report

Vietnam: Province-based Economic Growth (PBEG) Initiative (Apr. 2016)

BRVT Chairman Linh (right) meets Keidanren official on April 18.

Since 2015, JICA Vietnam and GRIPS Development Forum have joined hands in PBEG, which aims at creating high industrial growth in a few provinces to become a policy model for the country. Ha Nam Province in the north and Baria-Vungtau (BRVT) Province in the south were selected for their proactive mindset and economic potential.

After a research team of Vietnam National University collects basic information, a large mission conducts intensive policy dialogue with provincial leaders, meets with economic departments and agencies, and visits infrastructure, farms and factories. If the policy content and capability of the province are considered reasonable, JICA will prepare a large number of cooperation projects in industrial HR, infrastructure, etc. and invite Japanese investors appropriate for the province.  I am the leader of the policy dialogue between each province and the Japanese team.

With the opening of a new highway to Hanoi and active policies of the provincial leader, Ha Nam is attracting many Japanese manufacturers. BRVT has oil and gas, deep sea ports (Japanese ODA), and highways to Ho Chi Minh City are being constructed in steps. The top team of BRVT visited Japan in mid April and explained its policy to Keidanren.

Policy research in Thailand & Cambodia (Jun. 2015)

A GRIPS Development Forum team visited Thailand and Cambodia from May 25 to 29.

In Thailand we updated information on FDI-local firm matching for input procurement or joint venture partnership. There are several organizations promoting this linkage including BOI Unit for Industrial Linkage; Bureau of Supporting Industry Development of MOI; Japan Desk & One-Start-One-Stop Center under the Board of Investment (BOI); Japan Desk under MOI; Alliance for Supporting Industries Association (business association group); and Technology Promotion Association (industrial NPO). FDI-Thai firm matching is a difficult task, and no one organization can cover everything, but it is conducted reasonably well in Thailand with formal & informal networking and mutual reference among organizations.

In Cambodia we studied overall quality & practice of industrial policy. From the position of very weak policy capability, Cambodia is gradually gaining policy ownership. The Rice Policy, revisions of FDI law, a new SEZ law, and the development plan of Sihanoukville were drafted and some began to be implemented. The latest addition is the Industrial Development Policy (IDP) 2015-2025, approved in March 2015, that guides Cambodia's future industrialization. The broad direction of IDP is well-focused and reasonable, but implementation details must now be worked out. Policies are crafted and executed by a joint effort of several top technocrats. The Supreme National Economic Council (SNEC), the Ministry of Economy and Finance (MEF), and the Council for the Development of Cambodia (CDC) are the three lead policy mechanisms. Cambodia's current industrial policy is limited, but its dynamic mindset may produce good policies in the future.

Poor policy causes middle income traps (May 2015)

Click graph to enlarge

I drafted a paper on "The Quality of Industrial Policy as a Determinant of Middle  Income Traps" for a Singapore conference in August. This is an attempt to grade and compare industrial policy quality across countries based on our past policy visits & research. 13 governments in Asia and Africa are evaluated. More may be added in the future.

Preliminary results show that (i) there is a wide gap in policy quality across countries from excellent to poor (Asia is not always better than Africa); (ii) policy quality and per capita income are positively correlated (0.748); (iii) quality of various policies are similar within any government; and (iv) there is little evidence that resource endowment affects policy quality in one way or another.

The paper argues that proactive industrial policy needs to be learned and practiced because Washington Consensus policies (liberalize, privatize & integrate) cannot stimulate growth of a country trapped in middle income.

Policy quality comparison   Policy quality graph   Full paper

Policy research mission to Indonesia (Jun. 2014)

The GRIPS Development Forum team, together with two Vietnamese experts, visited Jakarta to study its industrial policy method. Indonesia has emerged as a huge middle income country with a population of 250 million and per capita income of $3,500. A very strong domestic demand attracts FDI firms, but export competitiveness remains elusive. Unlike Thailand (cars & pickup trucks), Malaysia (electronics & chips) or Vietnam (smart phones), there is no major manufactured product that Indonesia exports. Economic policy is turning inward & nationalistic in contrast to many neighbors which are open & outward-looking. Jakarta's transport system is seriously inadequate and wage pressure is far beyond labor productivity performance.

While policy making is reasonably competent, policy execution is weak despite a half century of industrialization. FDI, SME and TVET policies are more fragmented than in Thailand, Malaysia, and even Vietnam. One reason is big-bang decentralization that started in the early 2000s. Central ministries lost the policy grip as most policy implementation is in the hands of local governments. To overcome the middle income trap, Mr. Joko Widodo, the new president (photo from TV debate), must upgrade human capital and enterprise capacities as a top national agenda, not just building infrastructure and restricting & controlling FDI.

WTO and industrial policy (May 2014)

WTO has created 15 expert groups (E15) to review its functions. One of them is "Reinvigorating Manufacturing" whose first meeting was held in May 30-31 in Beijing, China. I was one of the invited experts.

WTO is often considered as a rule setter cum dispute settlement mechanism which is not very kind to latecomer development. Moreover, in recent years trade & investment issues have been negotiated by bilateral and regional mechanisms, not WTO. Apparently, WTO wants to reassert itself in a world where industrial policy is increasingly important.

I contended as follows: (i) WTO rules are quite ambiguous as to how much industrial policy is permitted and big countries often impose their own interpretations; (ii) WTO should balance rule setting with the need of latecomers to industrialize; (iii) WTO should clarify permitted policy measures and even proactively guide and assist developing countries to use them. Many participants, including WTO legal experts, agreed with my view. It is not yet clear whether WTO will take this proposal seriously - and that will decide whether I will attend the next E15 meeting.

Is Vietnam already in a middle income trap? (revised Apr. 2014)

Vietnam is reviewing the 30 years of Doi Moi (economic liberalization) and the possibility of a middle income trap is rapidly becoming a popular topic for discussion among policy makers.

GRIPS, National Economics University (Hanoi), and Industrial Policy Strategy Institute (Vietnam's Ministry of Industry and Trade) co-hosted a workshop on "Creating New Growth Momentum" in Hanoi on March 26, 2014. I was the first keynote speaker presenting multiple evidence that a middle income trap had already begun in Vietnam only six years after the country achieved a lower middle income status. I proposed several concrete actions to overcome this problem, including productivity focus, proper policy structure & procedure, FDI-linked technology transfer with detailed policy components, and introducing several standard policy measures not yet adopted in Vietnam (kaizen, benchmarking, scaling-up of pilot projects, national productivity movement, etc.)

Additionally, on April 15, the Communist Party Economic Committee organized a symposium on overcoming the middle income trap where I was also invited to speak. On both occasions my argument was covered extensively by TV and news & online media.

Light manufacturing in Africa (Mar. 2014)

My GDF team invited Dr. Ed Brown and Dr. Joe Amoako-Tuffour from the African Center for Economic Transformation (ACET, in Accra) and Dr. Hinh Dinh (WB, in Washington) to Tokyo for a symposium on Africa's light manufacturing at GRIPS on March 7, 2014. Additional meetings with Japanese officials and researchers were also arranged.

ACET just published the African Transformation Report which ranked the transformation performance of individual African countries and showed alternative possible paths for growth with DEPTH (diversification, export competitiveness, productivity, technology, human wellbeing). Dr. Hinh Dinh recently published a series of light manufacturing studies featuring Africa and Asia and a number of individual countries. Their results, together with industrial activities of GRIPS and JICA in Africa, were shared with audience which included officials, researchers, investors and consultants, media, foreign missions, etc.

ACET   WB light manuf studies