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Realising the aspiration to be a prosperous Vietnam

by NDO20 April 2021 Last updated at 16:31 PM

Vietnam aims to become a developed country with high income by 2045.
Vietnam aims to become a developed country with high income by 2045.

The 13th Party Congress not only set the national development targets for the next 5-10 years but also envisions a future in which Vietnam will become a developed nation by the mid-21st century when Vietnam marks the centenary of its founding.

Breakthroughs in mindset and institutions

What is new in the 13th Congress resolution is that international standards are used to set the specific targets and tasks for each stage. Including that, by 2025 when Vietnam marks the 50th anniversary of southern liberation and national reunification, Vietnam will be a developing country with a modern industry, surpassing the lower-middle income level. By 2030 when Vietnam marks the 100th anniversary of the Party’s founding, Vietnam will be a developing country with a modern industry and upper middle income. By 2045 when Vietnam marks the 100th anniversary of the country’s founding, Vietnam will be a developed country with high income.

According to economists, Vietnam’s target to become a high-income country in 2045 reflects the country’s aspiration to break through. Therefore, it is a must to find out new growth drivers and solutions to kindle such drivers. Compared with previous resolutions, the three breakthroughs put forward at the 13th Congress have many new points. With regards to institutions, the documents of the 11th and 12th Congresses only mentioned fine-tuning the socialist-oriented market institutions, but now they are expanded to fine-tuning the development institutions, with a focus on perfecting the legal system, mechanisms and policies so as to create a conducive, healthy and fair business environment for all economic sectors while promoting innovation. At the same time, perfecting institutions is also oriented towards mobilising, managing and effectively utilising all resources for development, especially land, financial resources, and public-private partnerships.

Nguyen Dinh Cung, former director of the Central Institute of Economic Management, said the mobilisation, distribution and effective use of resources can be considered the core of Vietnam’s current economic reform. The important point is that the 13th Congress resolution mentions institutional changes for effective mobilisation, distribution and use of resources. It is a change in mindset on institutional building and the orientation of management and development. It also emphasises and highly appreciates the role of the socialist-oriented market economic institutions as a prerequisite for bolstering national economic development.

Among the three strategic breakthroughs, the 13th Congress resolution emphasises the continuation of perfecting the socialist-oriented market economic institutions, with a focus on building and developing the markets for factors of production, especially land use rights, science and technology; and mobilising, allocating and using resources effectively in line with market principles. This will lead to fundamental changes in public investment management and channel public investment to the most effective projects and areas.

Similarly, state-owned enterprises (SOEs) are managing and using a great amount of assets, and the question is how to use this resource effectively so that SOEs can make a proportional contribution to economic growth in the next period. To that end, it is necessary to return and ensure the autonomy of SOEs in conducting business such that they work in accordance with market principles and compete fairly with the private sector.

For the private sector, if resources are allocated in accordance with market principles and in combination with the reforms that are under way on expanding the rights to do business, they will become a strong driver to stimulate stellar growth. Private enterprises will make greater and longer-term investments in science-technology and the digital economy.

Cung said there are two things that any country must always think of: managing to mobilise resources and using such resources effectively. These two aspects are closely intertwined and if there are mechanisms to tap into resources effectively, growth of 8-9% over the next ten years will not be a challenge for Vietnam. He added that once the breakthroughs are set in motion, one engine will drive other engines in an ever-expanding revolution, which will quickly increase the size of Vietnam’s economy.

Breakthroughs from digital economy

The development of the digital economy is determined as one of the strategic breakthroughs and core tasks. Professor Tran Tho Dat at the National University of Economics said that, in order to realise the aspiration for prosperity, it is necessary to effectively take advantage of the opportunities brought about by the fourth Industrial Revolution. In order for the digital economy to account for 20% of GDP by 2025, Vietnam first needs to fine-tune the institutional framework and management mechanism in the digital business environment, facilitate innovations in accordance with regional and global legal frameworks as a way to develop the digital economy, especially new business models and methods.

Policies on the digital economy needs to have a firm and consistent legal foundation so that plans and programmes on the digital economy can be implemented in reality. Incentive policies are needed to encourage and support enterprises in applying new technologies.

At the same time, Vietnam needs to increase investment, especially public investment to upgrade the digital infrastructure so that it can cover every aspect of the economy and reach out to every citizen. It is also necessary to build and develop the national data infrastructure in a synchronous manner, upgrade the technical infrastructure to ensure cybersecurity, and upgrade other critical infrastructure so that the people and enterprises can benefit from the digital economy.

According to Can Van Luc, chief economist at the Bank for Investment and Development of Vietnam (BIDV), the growth targets set in the documents of the 13th National Party Congress are feasible so long as Vietnam continues to focus on three strategic breakthroughs over the next ten years, including fine-tuning institutions, and developing infrastructure and human resources.

Specifically, institutions need to be synchronised and modernised in line with the trend of integration and digital transformation while infrastructure needs to be modernised and connected in order to reduce transport and logistics costs. Human resources development needs to focus on highly skilled workers who are readily adaptable to a rapidly changing environment in the country’s new stage of development.

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