Last updated: Tuesday, April 23, 2019


2019: Year of Economic Breakthrough

Posted: Friday, February 01, 2019

Prior to the advent of the Lunar New Year 2019, Mr. Nguyen Chi Dung, Minister of Planning and Investment, shared with the press on impressive economic growth of the past year, with great contributions of the foreign direct investment sector, and economic advantages ahead of the enforcement of the CPTPP. Anh Phuong reports.

Could you please introduce some remarkable contributions of the planning and investment sector to the overall economic success in 2018?
The economic picture of 2018 is very bright, driven by growth momentum of 2017. The economic growth, 7.08%, was higher than the previous year.

Most sectors reported comprehensive growth, with the agriculture, forestry and fishery sector expanding 3.76% - the highest in many years. The trade surplus hit an all-time high of US$7.2 billion and FDI-disbursed value rose to over US$19 billion.

Given the growth momentum in 2018, the National Assembly has approved the economic growth target for 2019, with the gross domestic product (GDP) target at 6.6-6.8%. To achieve the goal, what does Vietnam need to do?
Carrying out the direction and administration of the National Assembly and the Government on the fulfilment of socioeconomic targets in 2019, the Government recently issued Resolution 01/NQ-CP on key tasks and solutions on the execution of the Socioeconomic Development Plan and the State Budget Estimation in 2019. The inclusive resolution provides solutions needed to achieve the objectives of 2019. Under the light of action principle in 2019 “Discipline, integrity, action, creativity, efficiency and innovation” and the central focuses: (1) Improving internal capacity, consolidating macro foundation, and unlocking growth dynamics; firmly carrying out strategic breakthroughs, restructuring the economy, renewing the growth model; promoting scientific and technological application, innovation and start-up; (2), creating a favorable investment and business environment; focusing on completing institutions, improving the quality of law construction and enforcement; tightening administrative discipline and public service; paying attention to administrative reform, building an e-government and effectively streamlining the staffing apparatus; renovating and enhancing the effectiveness of judicial activities; (3), comprehensively developing and harmonizing cultural and social fields, raising people's lives and commemorating the 50th anniversary of Uncle Ho's will; strengthening resource management, environmental protection, disaster prevention and response to climate change; consolidating national defense and security, firmly defending independence, sovereignty, unity and territorial integrity; ensuring political security, social order and safety; promoting foreign affairs and international integration.

2018 marked 30 years of FDI attraction to Vietnam. How is this investment flow important to the Vietnam’s economy?
After 30 years of carrying out the open and integration policy, the foreign direct investment (FDI) sector has become an important, dynamic component of the economy and contributed significantly to the country’s socioeconomic development. By the end of December 20, 2018, Vietnam had 27,353 foreign investment projects with a total registered capital of US$340.1 billion, of which about US$188.8 billion was disbursed.
In addition, FDI is also considered one important driving force to promote economic growth in the past time. The sector plays an active role in restructuring and formulating some backbone industries of the national economy such as telecommunications, electronics and information technology, and at the same time, accelerates the industrialization and modernization process in many provinces and cities; and helps transform development space and form new urban areas, industrial parks, export processing zones and economic zones.

Besides, the FDI sector is important in maintaining export growth momentum. Until now, it holds over 70% of the country’s export value. Its foreign trade surplus has helped balance the trade, reduce exchange rate pressures, and improve international payment balance.

This sector also contributes significantly to budget revenue growth. In 2017, foreign firms paid more than US$8 billion to State coffers, accounting for more than 17% of fiscal revenue. This economic sector has created more jobs and improved human resource quality for Vietnam. But, mandatory requirements in this "sensitive" economic sector have also helped Vietnam actively enhance the market economy institution, improve the business and investment environment, and strengthen foreign relations, cooperation and integration.

Given fast global economic evolution, the planning and investment sector of Vietnam also proactively built a scenario for new-generation FDI attraction. Accordingly, the orderly prioritized areas will be high technology, new technology, advanced technology, environmentally friendly technology, information technology and telecommunications, electronics, automobile, agricultural machine, construction equipment, industrial equipment, electrical equipment, supporting industries, R&D, internet of things (IoT), artificial intelligence (AI), big data analysis (SMAC), virtual reality (VR), augmented reality (AR), cloud computing, digital economy, automation, biomedicine and new materials. At the same time, FDI flows will continue to be attracted to existing advantages such as textile and garment, leather and footwear, but priority is given to stages that generate high added value, use smart production and automation processes. In the coming time, Vietnam will focus on large-scale partners and G7 developed economies to seek more advanced tech and service projects.

CPTPP is officially in effect for Vietnam. What do you think about the advantages and challenges that this historic agreement gives to Vietnam?
In 2019, although many international organizations predict the world economy may grow slowly, challenges from trade tensions among major economies such as China, the United States, Japan and the European Union (EU) will have certain impacts on other economies, including Vietnam. But, prospects are on the horizon. I think that we need to be very flexible in the rapidly changing context to embrace all opportunities. Trade and investment probably have the room and potential to embrace opportunities.

Specifically, the official application of the CPTPP Agreement from January 14, 2019 will be a very favorable factor and we need to be flexible to make the best use of preferential tariffs and commodities and investment cooperation right from early 2019 to expand and develop the market.

Investment flows will continue to change in 2019. ASEAN and Vietnam are still attractive destinations for foreign investors. We need to prepare well to grasp all opportunities and select projects with updated technology, environment-friendly projects, and projects that source local vendors.

Thank you very much!

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