Vietnam 2035 Report: Towards GDP Per Capita of US$7,000

 

However, many experts and economists wondered whether Vietnam's economy can overcome the difficulties to achieve those goals. According to the report, Vietnam must achieve a high growth rate over 20 straight years, with GDP per capita rising 7 per cent a year (equivalent to 8 per cent GDP growth a year). By 2035, Vietnam’s GDP per capita will reach US$7,000 (equivalent to US$18,000 of purchasing power parity).

 

Deputy Prime Minister Vu Duc Dam, Chairman of Vietnam 2035 Report Steering Committee, emphasised the significant and historic achievements of Vietnam over the 30 years of economic reforms. From a poor, war-ravaged, centrally planned economy, Vietnam has become a middle-income country with a stable, safe political climate and is an active member in making and keeping peace. Vietnam 2035 Report aims to answer many development issues of the country in the next 20 years, such as what Vietnam needs to do to grasp opportunities, and how to overcome challenges and promote the effectiveness of benefits and resources to continue rising sharply, develop sustainably, escape the middle-income trap, ensure social justice and ecological environment to reach a thriving economy, sustainable environment, full and happy life for the people.

 

Economist Nguyen Minh Phong said, “It is hard to make a certain forecast but I believe that that goal is reachable after a series of institutional improvements and a 7 per cent growth in the past years. We are also happy to have a new leadership and favourable international and local context to move forward. But, it is more certain to set the target growth in the range of 6.5 per cent and 7 per cent because growth is not the sole objective, but rather, sustainable and harmonious development. If we only need a 7 per cent growth, we just borrow money and increase investment to achieve that.”

 

The objective is achievable but it will require stronger reforms. Dr Phong said, the Government should focus on improving the investment climate, supporting businesses to reduce institutional and financial burdens, credit costs and facilitation payments. If those burdens are removed and the business community make greater efforts, the economy will get strong impetuses. For the people, in the context of integration where products are diverse, people will need a reasonable reason to choose Vietnamese products. Besides, it is important to raise vigilance, detect unfair competition and use their own force to place pressures on the market.

 

“When consumers are aware of creating pressures, they will force businesses to work better and fix their unfair competitive ways. Sometimes, indifference among consumers leads businesses to more wrongdoings. This is one of positive points in the report,” he added.

 

Deputy Prime Minister Vu Duc Dam committed that the report will be referenced by the Government in policy-making process, with the first being the next five-year socioeconomic development plan (2016 -2020) and socioeconomic development strategy (2020- 2030). The government will implement mechanisms to monitor and evaluate reference results and apply recommendations of the report to further research, and update critical development issues.

 

Remarking on administrative and tax procedure reforms, Dr Phong said that the most important step in reform is still raising the awareness of officials at all levels and the private sector.

 

It is necessary to further improve the competitiveness of the private sector - the biggest existing weakness of this sector is lack of long-term plans due to constantly-changing, inconsistent legal environment and institutions. Low thinking begets short-term visions. The cooperation for national interests is weak, business culture is poor and they are ready to infringe on the law to bring their products to the market just for profit, not for the sake of consumers.

 

Although Vietnam’s competitiveness ranking in 2015 climbed 12 places, there are a lot of difficulties to business unaddressed. For me, laws must be amended to change these facts. As these relate to laws, the National Assembly must engage in. While facilitation payments remain the most pressing nuisance to enterprises, the fight against corruption must starts from personnel works. The readiness to pay for facilitation makes officials think that facilitation payments are natural. For instance, when paying taxes, they falsify figures to share benefits among them. Hence, the State official standardisation, mechanism transparency need supports from the business community to get done,” Dr Phong concluded.