Economic performance of open-access offshore fisheries—The case of Vietnamese longliners in the South China Sea

The South China Sea (SCS) fisheries are still open-access resources for fishing vessels from more than ten countries, including Vietnam. Since the mid-1990s, the government of Vietnam has run its offshore fishing program. Assessing annual economic performance of offshore fishing vessels are, therefore, needed in order to improve Vietnam's fisheries policy. This paper presents findings based on data collected through a representative sample of 32 registered offshore longliners operating in the South China Sea, representing about 16% of such vessels in Khanh Hoa, Vietnam. The empirical results suggest that the average annual crew remuneration equals 93% of labour earnings in the most productive sectors in Khanh Hoa. The owner of an average longliner has a profit margin of 12.1%. Regression analysis of annual vessel performance, represented by gross revenue and income after deduction of variable costs, shows that if other factors remained unchanged, a vessel of hull length 15.9 and 15.1 m would maximize gross revenue and income, respectively. Over-investment in vessels may lead to inefficiency and vessels financed partly by cheap offshore project loans have hull length longer than the level that maximizes annual gross revenue and income of the vessel.