VNHNO - Vietnam’s economic growth is relatively high thanks to economic restructuring kept on track but challenges are still ahead as growth dynamics are showing signs of declining, experts have said.
Economists gathered at a mid-term workshop held in Hanoi on September 5 to review the implementation of the master plan on economic restructuring for the 2016-2020 period and discuss measures to promote the process. The event was co-organised by the Central Institute for Economic Management (CIEM) and the Australian-funded Australia Supports Economic Reform in Vietnam (Aus4Reform) programme.
At the seminar, CIEM Director, Dr. Nguyen Dinh Cung, said that Vietnam’s economic restructuring during the first half of the 2016-2020 period has achieved positive results, reflected in relative high economic growth combined with growth improved quality and macroeconomic stability, thanks to effective support from Aus4Reform.
Experts at the workshop discuss measures to promote economic restructuring in Vietnam by 2020.
Labour productivity has improved. The industry and construction sectors continue to be the mainstay of high economic growth, with the contribution of mining to economic growth witnessed a significant reduction compared to the previous statistics.
However, Dr. Cung also pointed to limitations during economic restructuring, with resource allocating has not changed much towards the direction of improving efficiency. Large resource flows, such as agriculture to service and industry, rural to urban area, the State to private sector, and formal to informal area, are moving slowly, while these shifts are important factors for growth.
In addition, for the first time there is a sign of growth was lower than that of the previous quarter, raising the question of whether Vietnam's economic growth is on the downward trend or not, Cung added.
“If there is no difference in thinking, institutional reform, resource distribution and improving the efficiency of using State resources, the requirement for maintaining high and sustainable growth is a big challenge," stated the head of the economic think tank.
To create a high and sustainable growth engine, the CIEM director suggested continuing implementing the existing solutions but in a stronger and broader manner. It is necessary to develop and perfect production indicators, especially the financial market and land use right, while allocating State resources in accordance with the market regulations and promoting the development of private enterprises.
Dr. Nguyen Dinh Cung, Director of the Central Institute of Economic Management, speaks at the event.
Instead of trying to restructure the projects and enterprises that have suffered losses, resources should be invested in comprehensive restructuring, focusing on supporting effective enterprises and those with potential for development and effective corporate governance.
Most importantly, Dr. Cung stressed that there should be measures for research in preparation for the 2021-2030 period, as Vietnam has to complete the transition to a modern market and digital economy by that period, and also at the same time has to take advantage of the fourth Industrial Revolution’s opportunities. According to him, only improved market could create new momentum for growth and development.
Dr. Can Van Luc, an economic expert in banking and finance, recommended forming an independent body to evaluate the reality and effectiveness of the economic restructuring process.
In is important to clarify four factors to compare Vietnam’s economic growth with the world’s, that are business environment, business capacity, innovation and logistics costs, so as to clarify the distance of the Vietnamese economy with the world.
At the workshop, experts also analysed in detail the challenges to public finance reform, such as challenges to State budget collection reform, policy reform for increased budget revenues in short- and medium-terms, State budget expenditure, overspending and public debt, public investment issues and State budget transparency in the local level./.
