Financial reforms, towards restructuring Vietnam's economy

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The Vietnam Financial Forum 2019. Photo TL.

Financial policy reforms plays a vital role

Renewing the growth model and restructuring the economy is the trend of many countries around the world, including Vietnam. This is also the guideline and orientation of the Party and the State, which is concretised in the Socio-Economic Development Strategy for the period 2016-2020. With the vital role of the economy, finance has an important task in promoting the restructuring of the economy associated with the renewal of the growth model.

To accomplish this target, the Ministry of Finance has advised and planned financial policies to mobilise and distribute production resources in society and transfer national financial resources to meet the economic development, implement social policies and ensure security and defence.

The Ministry of Finance has also directed the strict implementation of discipline, budget collection and spending at all levels, sectors, localities and units, so the recurrent spending rate decreased and spending rate for investment and development increased.

Along with developing and perfecting documents guiding the Law on Public Debt Management, the Ministry of Finance has stepped up the restructuring of public debt towards sustainability. In addition, the Ministry has strengthened the inspection, supervision and implementation of measures to develop a balanced and comprehensive financial market, together with restructuring State-owned enterprises through accelerating the process of equitisation, divestment in enterprises, collecting sufficient dividends, after-tax profits, revenues from capital sale in enterprises under the National Assembly Resolution.

Speaking at the Forum, Sebastian Paust, First Counselor, Head of Development Cooperation Department, Embassy of The Federal Republic of Germany in Vietnam said 2019 is a time when Vietnam is experiencing many successful practices to prepare the socio-economic development strategy 2021-2030. This strategy contributes to shaping financial reform with Vietnam moving towards digital transformation.

“The Finance Forum is an important forum that shows that financial policy plays an important role in restructuring the country's economy. The modern reform framework, especially the increase in management efficiency in the public finance sector is an important feature in the process of approaching to upcoming long-term reform. We also appreciate the Vietnamese Government's approach to a financial policy as drivers for the growth model. This is a great effort of the Vietnamese government in restructuring of a country's financial policies,” he said.

Financial reforms must be consistent with Vietnam’s reality

Financial policies in recent years have met the requirements of restructuring the economy associated with renewing the growth model towards improving quality, efficiency and competitiveness. In general, the removal of the growth model and restructuring of the economy have become more substantive, creating many important and clear changes. However, the growth model has not changed sustainably and the restructuring of the economy has not achieved set goals.

At the forum, Paust said that to achieve the goal of reaching to the average income level by 2030 and becoming a country with higher income level by 2045, Vietnam must take world trade conflicts into account. The need to reform financial policy in this period is really important.

“For financial policy reform, the first issue is the quality and efficiency requirements of public investment. The second is high-level education, especially towards resources. The third is infrastructure and the development of the private sector. And it need to pay attention to environmental protection. Policy issues need to be evaluated and expanded appropriately, especially in the context that Vietnam needs to restructure its policies on debt management and public investment,” Paust emphasised.

With the aim of seeking drivers for renewing the growth model and restructuring the economy in financial policies in Vietnam, the Vietnam Finance Forum 2019 focuses on identifying the situation of the growth model and restructuring of the economy of Vietnam (limitations, obstacles and lessons learned in the process of renewing the growth model and restructuring the economy from 2011 to the present); orienting solutions to renew the growth model and restructuring the economy for 2021 - 2030, with a vision to 2045.

The forum will also assess the contribution of financial policies in the past 10 years for the process of renewing the growth model and restructuring the economy; at the same time pointing out bottlenecks / barriers in financial policies in general and in some specific sectors and fields before the need of renewing the growth model and restructuring the economy.

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"Currently, the German Government is continuing to strengthen long-term cooperation with Vietnam and especially the Ministry of Finance to enhance the exchange of experience as well as support for Vietnam. I look forward to witnessing more effective cooperation activities related to financial policies in Vietnam in the future,” Paust said.