Economic Recovery and Development Aspirations

The COVID-19 pandemic has caused twin crises in the world: Health and economy. Pains, lethargies and difficulties, among many other “unwanted sufferings”, have hurt us. Meanwhile, hardships, uncertainties and risks still lie ahead. Vietnam is no exception. But in such a lackluster picture, Vietnam and many countries around the world are still glowing with optimism, positive outlooks, and even aspirations for breakthrough development.

It is quite grounded for us to have such a faith on the verge of 2022. That belief is built on our solidarity to overcome the pandemic which is lingering unpredictably. It results from improved medical capacity, effective vaccines and cures, and a calmer attitude in the face of “living with” SARS-CoV-2 virus variants.

As a rule, the epidemic will be eventually over. Or when the epidemic is basically controlled, life will return to normality. Production, business, consumption, entertainment and life experience will resume in a more positive state.

In fact, the world economy recovered strongly in 2021 after a sharp recession in 2020, rebounding 5.9%. That recovery momentum is expected to be extended in 2022 although it may slow to a certain extent because the ground already gained higher in 2021 and monetary policy and socioeconomic support packages of many countries, especially developed ones, may be reined in and gradually tightened in the face of high inflation and other financial risks. But, the recovery will continue and this is a positive thing.

The pandemic has made us rethink our way of life and way of development. We need a greener, more humane, safer way of living and consuming. We need more sustainable, inclusive and creative development. This transformation is already underway but will be accelerated by the Fourth Industrial Revolution and digital transformation.

Handling national and international relations is not simple. However, there is a high consensus that, beside the paramount importance of national interests, the world needs to cooperate - the only way - to effectively handle many global issues such as climate change, epidemic and natural disasters, let alone shocking financial or economic crises.

What about Vietnam?

In the past two years, the country’ economic growth was lowest since doi moi. In 2021, Vietnam's economy missed the recovery pace of the world economy. But, the shift to “live safely” with the epidemic, persistent efforts of businesses and people, the Government's program to foster economic recovery and development, and the global synergy of positive growth momentum, especially of Vietnamese partners, made many experts forecast that Vietnam is highly likely to achieve growth rate of 6-6.5%. Behind these figures are better production and business, higher employment and income.

Despite many undeniable obstacles and challenges, Vietnam is well grounded for recovery: High political consensus and will, epidemic fighting experience, stable macroeconomic foundation, investment inflow, international cooperation and support from many countries and international organizations.

Essentially, Vietnam needs to act decisively, quickly and effectively. Support packages launched since early 2020 showed that it is difficult to have finance but it is more difficult to give it to the right recipients in need. Policy design (support criteria and processes), policy coordination, policy execution and monitoring are all aspects that need to be fully taken into account to make a support package/program really effective.

Current difficulties may slow down reforms. Along with efforts to overcome difficulties, it is also necessary to accelerate economic reform and restructuring to build the foundation for sustainable development and catch up with global megatrends. The support program for economic recovery and development will target such areas as institutional reform, infrastructure, innovation, and reskilling for workers.

Appropriate policy design, daring and smart action, and good risk management will be rewarded with development achievements. On the next journey, we can be proud but we cannot be complacent and satisfied because we still have to learn and be creative to overcome many obstacles and difficulties in a changing world where opportunities and challenges co-exist. Only with consensus and cooperation can we move forward toward national development and prosperity, catch up and go along with the times.

By Dr. Vo Tri Thanh, Director of the Institute for Brand and Competitiveness Strategy