Management should aim to improve the "supply" of the economy

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The economic management in the incoming period should be focused on increasing productivity for growth. Photo: HUU LINH.

Economic management are prone to interference and control

Vietnam's economy in 2017 is in a situation with volatility, including the policy sudden reversals in some major economies. In addition, the process of international economic integration has levelled off, the new generation FTAs that Vietnam has signed or are participating in negotiations have not changed too much. The first quarter of 2017 is marked by a low economic growth rate of 5.1%, while the full year target is 6.7%. To reach the target, according to the General Statistics Office, the growth rate should reach an average of 7% by the end of this year.

At the regular government meeting in April 2017, the Ministry of Planning and Investment released the growth scenarios for the remaining quarters and 2017, with a constant average for the remaining nine months of 2017. GDP growth must be around 7.1%, which is quite high compared to the same period of years from 2011 to 2016. Specifically, the increase in each quarter was determined that the second quarter rose by 6.26%, the third quarter increased by 7.29% and the fourth quarter rose by 7.49%. According to the Ministry of Planning and Investment, this scenario has taken into account the condition of the total social investment capital to 35% of GDP, the plan of production and export increases with the conditions of the world economy, business Domestic, weather and climate ... are favourable.

To achieve the goal, experts said that we need to focus on economic management. At present, the economic administration has gained many achievements, such as the thought of aiming a tectonic government has been transformed into changes in the mode of macroeconomic management of the Prime Minister, emphasize to substantial growth, sustainable, not swap with meaningless short-term achievements ..., but generally the economy management is not still considered as into focus.

The assessment by the Central Institute for Economic Management (CIEM) on economic management shows that Vietnam seems to be struggling to balance the demand for economic and social management (in the short term) and the reform orientation of economic institutions (in the medium and long term). Major orientations for reforming the growth model, restructure the economy and effectively implementing the process of international economic integration were adopted in 11/2016 and were became popular, but it is still slowly materialised. The prioritising reforms and administration are quite ambitious, but the coverage in many areas is the cause of lessening the focus, effectiveness and efficiency of the proposed measures. In addition, the private sector - an important subject of the economy - has not been properly facilitated to develop.

Dr. Nguyen Dinh Cung, Director of CIEM, said that the Government's management process in the past period still reveals some disadvantages such as the targets in the annual socio-economic development plan are prone quantity and input. The monitoring, evaluation and supervising of indicators performance were also not implemented and concern in management when there are just indicators of GDP and inflation were monitored and evaluated regularly ... The way and the tool for managing the socio-economic development is more prone to intervention, administrative control rather than market-based instruments. The current operating mechanism is mainly in the direction of asking - giving, every day giving hands to work. This mechanism hampers strategic thinking and reforms, does not encourage the creativity, distorts the market and resource allocation, reducing productivity and investment efficiency. In fact, it also shows that the economy operates in an inefficient way. The consequence is that growth did not take full advantage of its potential, average inflation is high and unstable.

Change thinking and the way to manage

Currently, the economic context and some socio-economic development conditions have changed such as the macroeconomic situation has been relatively stable, the capital mobilization in the economy has increased, the budget deficit is big, public debt is high and rapidly increase, natural resource is getting exhausted, The new government is committed to restructure the economy, transform the growth model ... therefore, the economic and social development in general also the macroeconomics, in particular, needs to change.

Representatives of CIEM said, in the incoming period, we need to shift the focus into productivity growth, prosperity and social welfare. Macroeconomic management should mainly focus on macroeconomic stability, at the same time enhancing implementation capacity and forecasting, analysing and evaluating macroeconomic factors, identifying favourable factors and risks and threats to the economy. For the growth target, Mr. Cung emphasised the need to focus on productivity-enhancing policies, which are the changes that improve the "supply" of the economy, rather than focusing on changing the demand factors.

"It is necessary to change the management thinking and the way in which the economy is directed towards focusing on solutions to improve the supply in order to enhance the labour productivity and efficiency of the human resource rather than operating to increase numbers. Such as quantity of investment, employment, exploitation of resources because it is not suitable in the current context", said Dr. Nguyen Dinh Cung emphasised. In addition, it is necessary to change the way it is implemented in the direction of gradually moving from issuing resolutions in the direction of the current administration to promulgating thematic resolutions, defining reform priorities for the year.

In this issue, economic expert Nguyen Mai said that we have many successful economic models such as in large sample fields, shrimp farming, 4G service development in the industrial revolution 4.0, along with The success in reforming administrative procedures in many areas ... but we have not summarised and the mechanism to replicate these models. "The Government should cut off travel abroad in order to seek experiences of successful model, we should hand the mission over research teams which were success in the fields of Customs, taxation, business, industry and agriculture,… in our country, thereby recommending the government replicate to other sectors", professor Nguyen Mai suggested. According to Prof. Nguyen Mai, we should change the way the government operates, in the way that the responsibilities of each position must be clearly defined so that the leaders should not do things that only the role of professionals, this is very wasteful. According to experts, the major work of the Government, Government members, ministries, local people's committees is now focused on the key of restructuring, the transformation of growth model ... This is the key to economic management.

According to the assessment, the results achieved in the management of socio-economic development in 2016 is remarkable, however, the need to improve the management work is still pretty much. The process of changing the management mechanism toward the building of a tectonic government is still difficult, requiring the political skill, spirit and determination of the whole apparatus, a coherent strategic direction, step by step to create the transformation. In the process, overcoming obstacles to group interests and corruption will determine the success of the Government in the reform process.

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