In a recent interview with the Viet Nam Government Portal, Carolyn Turk said she would want to congratulate the Government on its performance over the past five years, particularly on the following aspects.
(1) Enabling the business environment and administrative reforms: In addition to investing in reforms aimed at opening up to trade and FDI, Viet Nam also implemented a series of reforms aimed at reducing the cost of doing business by streamlining bureaucracy for businesses over the past few years.
Notably, the new Law on Enterprises took effective as of January 2021. The Government has cut 3,893 out of the total of 6,191 business conditions (accounting for 63%).
In term of administrative reforms, Viet Nam has really sped up the digital transition, with the roll out of various public services on the digital space, and the opening of the first ever national public services portal.
Noteworthy were the recent roll out of the digital databases for ID, for social security and land.
(2) Macroeconomic management: Public debt fell to by 55.3% in 2020 from 63.7% in 2016 – more than 8% in 4 years. This reduction is unprecedented across the world and should be commended.
CPI was downed to 3.2% compared to 7.65% in the previous 5-year period.
Viet Nam was able to maintain macro-economic stability with average economic growth rate of more than 7% for 2018 and 2019, and despite the COVID-19 pandemic, Viet Nam recorded growth of 2.9% last year.
(3) Effective management of COVID-19 pandemic. The pandemic is unprecedented and many countries across the world are still struggling to contain it.
But Viet Nam has managed to keep the health impacts of the pandemic to minimum, thanks to a combination of quickly and strictly implemented policies, including travel restrictions locally and internationally, and aggressive find, test, trace and isolate (FTTI).
Despite the COVID-19 pandemic, the economy expanded, making Viet Nam one of the very few countries seeing growth.
These, and many other achievements, set a firm foundation for the next Government to start the implementation of the next 5-year plan and 10-year strategy.
Asked about her recommendations for the next tenure, Turk said 2021 is the first year Viet Nam starts the implementation of the 10-year strategy and 5-year plan. The new Government is tasked with the implementation of this plan, which set the country on a trajectory to reach the goals of the 10-year strategy, and the vision for 2045 as set out recently by the country’s leaders.
To do so, new and stronger efforts should be placed on making the country more competitive, through a heavier focus on science, technology, and innovation agenda, according to the World Bank Country Director.
To become a high-income economy, Viet Nam will need to generate productivity gains through innovation, skills development and accelerating its digital transformation.
At this stage, Viet Nam’s access to higher education, as measured by the gross enrolment rate (GER), is below 30%, one of the lowest among the East Asian countries, only more than half of Thailand and a third of the Republic of Korea.
Viet Nam also needs to address inefficiencies in its existing model of urbanization and decentralization, she added.
The country will need to address the remaining issues of ending extreme poverty in traditionally underserved ethnic minority communities (account for 86% of all the poor), while coping with the challenges emerging from the growing and aging middle class.
At the same time, Viet Nam is one of most vulnerable countries in the world to climate change, with high and rising levels of pollution (air, water), and is destroying its natural capital at an accelerating pace. The Southeast Asian nation is one of the five countries most affected by sea level rise, and about 12 million people in coastal provinces are exposed to the threat of intense flooding. Each year, an average of $852 million – or 0.5% of GDP – and 316,000 jobs in key economic sectors are at risk from riverine and coastal flooding. This could be another area of focus for the new Government.
And finally, Viet Nam needs to green and clean its growth, to make the country one worthy of living. Viet Nam reports one of the world’s highest CO2 emission per capita income, and Ha Noi is one of the cities with low air quality.
Clearly, something can be done here. The World Bank has been a long-term trusted partner of Viet Nam for the past 25 years and we commit to continue our support to the new Government to achieve the country’s ambitions.
