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Achieving quality growth in 2021-2030

Released at: 16:46, 10/06/2019

Achieving quality growth in 2021-2030

Photo: Viet Tuan

Mr. Ousmane Dione, World Bank Country Director for Vietnam, discusses what the country needs to do in the years ahead to guarantee quality growth.

by Mr. Ousmane Dione, the World Bank's Country Director for Vietnam

As we look ahead to the next decade, I see opportunities but I also see risks. The world is changing rapidly and Vietnam needs to keep pace or it will risk falling behind. Global trade patterns are shifting. Asia will continue to rise and is expected to become the center of gravity in the global economy in the next decade.

The rising Asian consumer markets present key opportunities for Vietnam. At the same time, the increasing adoption of advanced manufacturing technologies - robotics, 3D printing, smart manufacturing - in labor-scarce economies and in China could challenge Vietnam’s ability to continue to rely on export-driven growth. But they may also create new opportunities for faster technological catch-up and even leapfrogging.

Domestically, Vietnam will have to contend with its rapidly aging population, tepid productivity, and sluggish investment growth, which weigh on its medium-term growth potential. Many of the drivers that propelled the country’s growth in the past will diminish over the next decade. Gains from structural transformation - workers moving from lower-productivity agriculture to higher productivity manufacturing and services - is running its course. Wages are rising and will start to erode Vietnam’s current comparative advantage in relatively low-value, labor-intensive segments of global value chains.

So, while Vietnam has every potential to sustain its development success, it will have to seize opportunities, manage risks, and push ahead with bold reforms. The socioeconomic development strategy and plan are golden opportunities for Vietnam because they will shape the country’s development roadmap for the next decade. We cannot afford to miss these opportunities. This decade is a critical time for Vietnam as it confronts new challenges and seeks to fulfill its ambition of becoming a high-income economy by 2045.

How can Vietnam sustain high growth but with quality? How can Vietnam modernize its market institutions to create an environment where private sector firms, including domestic ones, can flourish? What skills are needed for Vietnam’s workforce to be competitive not only in basic manufacturing but to move up the value chain, keep pace with fast changing technologies, and do so without leaving groups of people behind? How can Vietnam ensure its growth does not harm the environment while tackling the severe impacts of climate change? Finding policy solutions to these questions will not be easy and implementing them probably even harder. But with the right mindset and strong determination and coordination both horizontally and vertically, I am convinced Vietnam can do it.

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