Vietnam’s economic restructuring has been discussed too much, said economist Le Dinh An. However, Vietnam has not shaped a clear growth model to date and lacked a good organisation for restructuring. If the issue is simply assigned to some ministries and enterprises, the economic restructuring scheme will go nowhere in the next five years. Economic restructuring must be assigned to a specialised steering committee. In addition, the State is still involved in managing a lot of commodities prices while, according to successful experience from developed countries, it should be involved regulating, not get engaged in any areas where the private sector can do well.
The Central Institute for Economic Management (CIEM) recently held a seminar to launch the Macroeconomic Report for the Third Quarter of 2016, a part of the Restructuring for a more Competitive Vietnam Project (RCV - CIEM). The workshop aimed to portray the economic picture of the third quarter of 2016 and envisage macroeconomic orientations in the last months of the year.
Mr Nguyen Anh Duong, Deputy Director of the Macroeconomic Policy Department (CIEM), said that the Vietnamese economic picture in the third quarter of 2016 changed substantially from the first six-month period. Specifically, the third-quarter economic growth recovered; inflation and interest rates were under control; and export growth was higher than most countries in the region. The gross domestic product (GDP) rose 6.62 per cent in the third quarter from a year ago. Industry - construction sectors continued to be growth engine of the economy (expanding 8.1 per cent in the quarter). Agriculture, forestry and fishery regained the growth trajectory (up 1.48 per cent) in the face of mounting difficulties. Value-added services climbed 7.03 per cent, its highest level since 2011. Nevertheless, the growth target of 6.7 per cent for the year is hardly achievable. Even, the reduced growth target of 6.3-6.5 per cent for the entire year will also require more policy efforts in the fourth quarter.
Pointing out limitations, Mr Duong said, renovation process needs a complete competition mechanism. Although Vietnam had the competition policy since 2005, the gap in the legal framework of competition enforcement was yet to be filled and insufficient market discipline resulted in unhealthy and unfair competitive environment. Hence, the report recommended that the government continue to make efforts with measures to regulate macroeconomic development towards a healthy and effective market economy.
CIEM President Nguyen Dinh Cung admitted that our target growth and economic administration are now questionable. The GDP growth target set by the lawmaking National Assembly is apparently infeasible.
He noted that the current growth model and growth methodology are based on the increase in volume and inputs such as labour and resources, while making light of long-term growth factors such as productivity and quality.
This short-term approach gave rise to unsustainable growth. In administration, we are now utilising these tools to boost macroeconomic growth by mobilising and increasing investment capital, and increasing credit for expansive fiscal and monetary policies. Even, the Government used a series of stimulus and economic support packages.
Cung said, Vietnam usually makes light of strategic strategies but focuses on short-term tasks. As for economic restructuring with three current scenarios, it is only needed to tighten spending (reducing deficit) and promote quicken State-owned enterprise restructuring (relocating resources) to add GDP growth by 0.5 percentage point to reach 7 per cent this year. Besides, Vietnam did not make any move in improving the investment climate because after three years of enforcing the Resolutions 19, its business environment increased from the 93rd to the 82nd position but its starting a business index dropped 10 places.
Economist Pham Chi Lan said, the Government has made the observation and consultation from domestic and international experts to have at least 2-3 different growth scenarios, not only the choice of 6.7 per cent.
Anh Phuong
Vietnamese
