Efficient Deployment of Financial Resources: Decisive Condition for Growth

Mobilizing and effectively allocating financial resources is essential for Vietnam to achieve double-digit economic growth in the coming period. It also provides a critical foundation for Vietnam to become an upper-middle-income country by 2030 and move toward high-income status by 2050.

Deploying financial resources effectively is a key condition for driving sustainable development of Vietnam’s economy

Allocating to the right places, using resources effectively

According to Deputy Minister of Finance Do Thanh Trung, with the guiding principle that domestic resources serve as a long-term strategy while external resources are an important, regular, and breakthrough factor, mobilizing sufficient capital is a major task. However, allocating capital to the right priorities, using it efficiently and transparently, and creating high value added are even more important and must be given top priority.

Over the past five years, state budget mobilization has reached approximately 18.3% of GDP, while the State has implemented tax and fee reductions and extensions totaling about VND1.1 quadrillion (US$44 billion) to support businesses and economic recovery. At the same time, increased revenue and expenditure savings of around VND1.5 quadrillion (US$60 billion) have been allocated to development investment, national defense and security, science and technology, wage reform, social security, and national target programs. To achieve the goal of double-digit growth in the 2026-2030 period, total social investment capital is estimated to need to average around 40% of GDP, requiring a fundamental shift in thinking on how resources are mobilized and used.

According to Deputy Minister Do Thanh Trung, the focus is not only on mobilizing sufficient capital, but more importantly on allocating it correctly, using it efficiently, and creating high value added. Vietnam’s current growth model, which relies heavily on cheap capital, low-cost labor, and processing activities, is gradually revealing its limitations, creating the need to significantly expand total social investment. Therefore, fiscal policy must continue to play a role in fostering long-term growth, be managed proactively and sustainably, and have clear priorities, with emphasis on restructuring state budget expenditure toward development investment and ensuring social security.

In particular, strengthening close coordination between fiscal policy and monetary policy is a key factor in both maintaining macroeconomic stability, controlling inflation, and supporting high growth in a context of increasing risks.

At the same time, the capital market needs to continue to be strengthened and developed to become the main channel for mobilizing medium- and long-term resources for the economy, gradually reducing pressure on the banking credit system while enhancing market transparency and safety.

Alongside financial and monetary solutions, improving the efficiency of state-owned enterprises and creating a favorable environment for the private sector have been identified as important factors driving growth. At the same time, the investment and business environment needs to continue to be improved so that the private sector truly becomes the most important driver of growth and innovation.

In particular, institutional reform and the development of a transparent and stable legal environment have been identified as foundational and decisive solutions to retain financial resources and attract businesses, especially investors with long-term strategies in Vietnam.

Diversifying capital mobilization channels

Dr. Nguyen Duc Hien, Vice Chairman of the Central Commission for Policy and Strategy, said that to meet the economy’s very large capital needs, Vietnam must reform its capital mobilization structure and improve allocation efficiency, as the banking system’s capacity to support growth is gradually reaching its limits. An economy that relies too heavily on banks carries significant risks; therefore, the stock market, bond market, and international capital flows need to be developed in parallel to create a balanced, competitive, and mutually supportive capital structure.

Vietnam needs to diversify capital mobilization channels while decisively improving the capital absorption capacity of both the public and private sectors. Even for public investment, the focus should not only be on project lists, but also on the growth effects of these projects in subsequent periods as well as their long-term impact on the economy.

In particular, Dr. Nguyen Duc Hien said that the economy’s capital absorption capacity, especially in the private sector, remains a major bottleneck. Therefore, developing the private sector, particularly enhancing the governance capacity of small and medium-sized enterprises, is of critical importance in improving the efficiency of financial resource utilization.

He also emphasized that the efficiency of capital allocation and use must become a cross-cutting criterion throughout the disbursement process, applicable to both public investment and private sector investment. This places a requirement on continuing to improve the quality of institutions and the operating mechanisms of the economy.

In addition, a new mindset is needed regarding regulations on corporate bond issuance. Currently, the issue is not merely whether collateral is required, but more importantly the need to build a credit rating system and a transparent market. Rigidly imposing a requirement that all bonds must be secured by collateral would become a major barrier for enterprises in mobilizing capital.

Vietnam is facing the need to accelerate strongly in the next stage of development. One of the decisive challenges for achieving high growth is ensuring sufficiently large capital resources for the economy while using them effectively to promote a growth model based on science and innovation. Therefore, completing institutions for capital mobilization and allocation, diversifying financial channels, and linking capital flows with productivity enhancement, digital transformation, and sustainable development will be the key for Vietnam to break through, enhance competitiveness, and realize its development goals in the new period.

By Quynh Anh, Vietnam Business Forum