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Restructuring results are still limited

At the seminar on Vietnam's economic development prospects and the role of the creative State in amending the institution and business environment, the Vietnam Economic Report 2016 on economic restructuring associated with innovation of the growth model and the role of the State’s creation and development, were announced.

Assessment on Vietnam’s economic performance in 2016 and prospects for 2017, the Vietnam Economic Report 2016 on economic restructuring associated with the growth model renovation and role of the State’s creation and development, agreed with the comments on positive points stated in the National Assembly's Resolution No. 23/2016/QH4 dated November 7, 2016. On the other hand, the report emphasized the limitations of Vietnam's economic development, such as the targets and plans set out for 2016 economic growth which were not achieved and were much lower than 2015, and public debt was at an unsafe warning level, and warned of increasing macro risks.

Specifically, according to Prof. Dr. Ngo Thang Loi, National Economics University, economic growth was only 6.21%, inflation was 4.74%, while inflation in 2015 was 0.63%, public debt was nearly 65%. Besides, some targets were not reached, the economic structure moved to a negative trend, and the FDI sector was still the main force of import and export goods exchange.

For the prospect for 2017, the report forecast two growth measures of 6% and 6.6%. For the implementation of the targets, the report said that it depends on the determined and scientific calculations to make breakthroughs in actions of the State, the Government, localities, enterprises and the entire society.

Regarding the assessment of the implementation of the economic restructuring task associated with the growth model renovation, besides the initial results contributed to economic growth, the efficiency of growth was improved. The economic growth still had a positive impact on social progress. The report also said that the achievements of the economic restructuring in the past time were still very limited and did not create conditions for a good growth model.

In particular, the characteristics of Vietnam's economic growth model, if they are assessed from the perspective of input structure, they are still mainly dependent on capital, and if they are assessed from the perspective of sectors, they still rely on goods processing, even processing in agriculture, and from the perspective of economy, export growth are heavily dependent on the foreign-invested sectors, while the private sector is still limited and using many low productivity employees. The State sector has not played a leading role while the private sector has not been able to rise.

Strengthen accountability

The report of the National Economics University affirmed that in 2016, Vietnam achieved some results, especially in implementing the task of economic restructuring associated with the growth model renovation and the construction of the Creative State was considered as the action manifesto of the Government.

However, there are many issues which need to be resolved in the renovation process. The implement of these tasks need to be transformed into specific programs such as restructuring the agricultural sector, processing industry, and high quality service industries, etc. The system of monitoring and evaluating the implementation of these programs needs to be built objectively and transparently to strengthen accountability. This is a long-term process whose success depends on the determination and will of the entire political system.

For Vietnam economic restructuring for 2017-2020, Prof. Dr. Le Du Phong said we need focus for 2017-2020, particular the processing and manufacturing sectors need to be restructured in modern ways. According to Prof. Dr. Le Du Phong, in 2015 the processing and manufacturing sectors accounted for 13.8% of GDP, we exported over $US 100 billion worth of goods but the export goods with low technology content accounted for 31,7%, mainly were electronic products, footwear and garments. The expert said that, in the process of agriculture restructuring which was the key economic sector of Vietnam, if only mentioning agriculture restructuring is not sufficient. Accordingly, the agriculture sector needs to be restructured under 4 methods: changing in manufacturing method, sector structure, regional structure and manufacturing technology. Besides, he emphasized that the private sector needs to be supported.

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“The policies supporting the private sector need to be issued and this was a motivation for economic development. Currently, the role of private sector is too small, so its role needs to be enhanced equal to the State sector and FDI sector” said by the expert.

According to Prof. Dr. Le Xuan Ba, the former Director of the Central Institute for Economic Management, we must clearly define and accept the price that we have to pay for economic restructuring and growth model renovation. In fact, if we do not abolish the old ways, we can not establish new ways. Hence, we need to determine the acceptable price to pay, if we do not accept, we will never be successful in growth model restructuring.