GDP growth must rely on internal strength: economists

GSO said the major driving force behind the high growth rate were the development of processing, manufacturing industry, export and domestic consumption (12.8%, while Samsung reported the growth rate of 45%); improvement in agriculture production and fisheries; and a sharp increase in exports (+19%), especially from foreign invested enterprises.

Le Cao Doan, a renowned economist, noted that domestic production did not make a big contribution to GDP.

Vietnam’s exports increased by 8.6% in 2016, higher than the 8.1% growth rate in 2015. And the exports continued rising with US$200 billion worth of earnings in the first eight months of 2017, an increase of 13% compared with the same period last year.

The highest number of exports were not from Vietnamese enterprises, as foreign invested enterprises were the major exporters.

Reports all show that foreign invested enterprises export more than import, while Vietnamese firms import more than export.

Vietnam’s export turnover exceeded the US$100 billion threshold in 2012 (US$114.5 billion).

However, Vietnamese enterprises’ export turnover was US$50 billion in 2016. Their exports increased by 4.8% only in the same year, much lower than the average growth rate of 8.6% and the foreign invested enterprises’ rate of 10.2%.

Doan said that Vietnam needs to face facts that the high jump in the GDP growth rate in the third quarter relied on exports of the foreign invested economic sector, and that internal strength has not been improved.

Truong Thanh Duc from the Vietnam International Arbitration Center said that it was not good news that Vietnam gained a high growth rate thanks to the foreign-invested sector.

“This shows the dominance of the foreign invested sector over the domestic economic sector,” he said.

Duc emphasized that though the proportion of the foreign invested sector’s exports has increased rapidly from 57% in 2005 to 67% in 2013, its contribution in terms of added value to GDP has increased inconsiderably from 15.2% in 2005 to 18.07% in 2015.

Regarding the quality of growth, Doan pointed out that while the GDP grew sharply in the third quarter, the 9-month inflation rate was very low at 1.45%.

He said that the figure should be seen as an indicator of a downward trend. In principle, when Vietnam wants a high GDP growth rate, it has to accept a certain high inflation rate.