Workshop on report from Vietnam Institute for Economic and Policy Research discusses difficulties in meeting socioeconomic targets and identifies possible solutions.
Vietnam failed to reach ten out of 26 socioeconomic targets set by the National Assembly (NA) for the 2011-2015 period, mostly relating to economic productivity, and in the 2016-2020 period its economy will face various challenges in meeting development goals, a workshop releasing and discussing an economic report from the Vietnam Institute for Economic and Policy Research (VEPR) was told.
The Workshop of the Vietnam Annual Economic Report 2016 was co-organized recently by VEPR, the University of Economics and Business (under the Vietnam National University Hanoi), and the Embassy of Australia in Hanoi.
The report identified key economic factors in 2015 and made recommendations and expectations for the five-year period from 2016 to 2020.
2015 was a challenging year for Vietnam as it was buffeted by the global economy. GDP growth at 2010 prices was 6.68 per cent, the highest since 2008. The industrial sector grew at a handsome 9.64 per cent, exceeding the 5.08 per cent and 6.42 per cent recorded in 2013 and 2014, respectively. The budget continued to be in a substantial deficit, however, estimated at VND266 trillion ($11.93 billion), or 6.34 per cent of GDP, and well in excess of the target of 5 per cent set by the NA.
Platform for 2016-2020
The Communist Party Congress in 2016 set a target of average annual economic growth in the 2016-2020 period being between 6.5 and 7 per cent and by 2020 GDP per capita is to be $3,200-$3,500. The workshop heard that such targets will be difficult to achieve due to ineffective policies resulting from a lack of involvement from the business community and the absence of inter-ministerial coordination in building and executing strategies and action plans.
To address the problems, three players that can make institutional reforms possible were identified at the workshop: the country’s leadership, a technocratic team combined with a national council, and foreign partnerships.
The government should also select only a few industrial areas of high priority, focus on industrial human resources and promote small and medium-sized enterprises (SMEs) and support industries, while industrial clusters should also be given greater attention.
Furthermore, to tackle national development issues systematically, ministries cannot take responsibility for the broad range of strategies needed in industry, trade, investment, technology, taxes and tariffs, budgeting, foreign direct investment (FDI), overseas development assistance (ODA) and so on. VEPR strongly recommends the establishment of a national council, headed by the Prime Minister or the Deputy Prime Minister in charge of industry, which would supervise and coordinate key industrial strategies.